Hong Kong is planning to establish a unified carbon emissions trading market in Guangdong, Hong Kong and Macau to attract foreign investors, says Grace Hui, head of green and sustainable finance at Hong Kong Exchanges and Clearing (0388).
Hui told lawmakers in a Legislative Council panel meeting a national carbon trading market started in Shanghai in July.
However, trading volumes were comparatively low due to a lack of foreign investors and futures products.
She said it is hard for Hong Kong to develop a carbon trading market on its own.
To that end, Hong Kong is connecting with Guangdong and Shenzhen's carbon exchanges, hoping to take reference from their experience to develop a unified market for the province and the two special administrative regions.
HKEX and the Securities and Futures Commission are studying ways to bring investors to the Greater Bay Area's carbon market via existing channels, including bond connect and stock connect, said Hui, adding that the study is expected to finish by the end of the year.
HKEX signed a memorandum of understanding with Guangzhou Futures Exchange last month to boost sustainable development in the two regions, she said.
Joseph Chan Ho-lim, undersecretary for financial services and the treasury, also said at in the panel meeting that research on the possibility of a regional carbon market in Hong Kong and the potential of carbon financial products is expected to be done by December.
Chan expected the Hong Kong standard to match that of the mainland and European Union.
Meanwhile, more details about Bond Connect Southbound Trading are to be given as soon as this week.
Some banks were said to have conducted final tests on the wealth management connects system last week.
In other news, former Hong Kong Monetary Authority chief executive Joseph Yam Chi-kwong said that the key to the development of Hong Kong's financial industry is to assist the yuan's internationalization.
He said the market should rest assured about the yuan since it won't take long for China to develop into the world's largest economy.
