In this April 11, 2023 photo, a man walks past the entrance of the Hong Kong Monetary Authority building in Central, Hong Kong. (CALVIN NG / CHINA DAILY)

Hong Kong and the Chinese mainland have reached a general consensus on measures for the cross-boundary Wealth Management Connect (WMC) program, Hong Kong Monetary Authority Chief Executive Eddie Yue Wai-man said on Friday. 

Yue made the remarks in Beijing, where he is leading a delegation of the Hong Kong Association of Banks on a three-day visit. 

The connect program was launched more than a year ago and the two sides have been discussing measures to improve its implementation, including expanding the range of products, easing investor requirements, and streamlining the sales process, he said.

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Yue added that authorities from Hong Kong and the Chinese mainland are also working on measures to optimize the southbound trading under the Bond Connect program, including expanding the scope of products and investors, and increasing market makers, which he hopes willbe launched as soon as possible.

Yue cautioned that interest rate adjustments might be different from the past, and Hong Kong's interest rate may rise faster towards the US rate, which is normal under the currency peg

However more technical negotiations are required for the inclusion of yuan-denominated stocks into the southbound leg of the stock connect program that links Hong Kong, Shanghai and Shenzhen stock exchanges,  he said. 

The recent rise in Hong Kong dollar interbank rates is a reflection of the market's anticipation of the US potentially raising its interest rates next week, Yue added. Whether the best lending rate will be increased in the future is dependent on banks’ commercial decisions, he said. 

Yue said he believes Hong Kong banking system's aggregate balance has now reached a stable state at over HK$40 billion ($5.2 billion). 

He cautioned that interest rate adjustments might be different from the past, and Hong Kong's interest rate may rise faster towards the US rate, which is normal under the currency peg.

Chairman of the Hong Kong Association of Banks, Sun Yu, said authorities on the Chinese mainland have expressed their support for Hong Kong to enhance its position as an international financial center, hoping Hong Kong will give full play to its role as a superconnector to promote Chinese mainland economic development, financial connectivity, RMB internationalization, Greater Bay Area development, and international investment and financing services.

He mentioned that the delegation's visit to Beijing has received support from the mainland authorities, which reflects that the central government attaches great importance to the development of Hong Kong's financial industry. 

He acknowledged that the Hong Kong financial market is facing challenges amid the complex and changing external environment. However, he said the city’s business environment, financial market system, financial infrastructure, and regulation are global leaders. 

In the face of uncertain market conditions, Hong Kong can leverage its advantages in internationalization and act as a bridge between the Chinese mainland and the world to achieve healthy and stable development of its financial industry, he said.

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Responding to the difficulties that some Hong Kong residents face when withdrawing money on the mainland, Sun said more Hong Kong residents have started to use banking services on the Chinese mainland after the border reopening. He believes that banks will optimize their processes to better serve their customers.

The delegation will return to Hong Kong late on Friday.