RMB Globalization and China’s Investment Needs
RMB Globalization and China’s Investment Needs
On July 4, the UBS Center hosted its first event abroad by organizing a high-level forum in Hong Kong. The keynote speaker, Professor K.C. Chan, Secretary for Financial Services & the Treasury of the Hong Kong S.A.R. Government, discussed “Opportunities and Challenges for the Financial Service Sector.” In his keynote address, Professor Chan identified the primary causes of the recent volatility affecting international markets as: concern over the tapering of the asset purchasing program in the US; the liquidity crunch in China; and the sell-off in Portuguese government bonds as investors anticipate a debt-restructuring event.
Professor Chan stated that policy in China has the potential to benefit Hong Kong as it reins in shadow banking, implements structural reforms, and changes the economic model. He is bullish on the ability of China’s leadership to meet the challenges ahead. China’s strong track record and the liberalization of the capital account and capital markets will be a “win-win situation” for both Hong Kong and the Mainland. He highlighted the key role played by Hong Kong in China’s financial reform program, including the establishment of the H-share market and the listing of state-owned enterprises in Hong Kong.
In the panel discussion, Chi-Won Yoon, CEO of UBS Asia Pacific, said that despite a challenging start, the Qualified Domestic Institutional Investor program, which requires specific qualifications from Chinese investors investing outside their home country, can be expected to attract more interest as uncertainty about a Renminbi appreciation prompts Chinese investors to diversify. Professor Zilibotti and Professor Zheng Song of the University of Chicago agreed that the comparative levels of global and Chinese interest rates will be central in determining both the timing and manner in which convertibility is introduced. Professor Zilibotti also provided quantitative evidence on the much-debated question of the valuation of the Renminbi, concluding that the Chinese currency is not undervalued in real terms.
Also on the panel was Thomas Fang, Head of Greater China Equity Derivatives Sales at UBS, who provided the business perspective on the matter.
On July 4, the UBS Center hosted its first event abroad by organizing a high-level forum in Hong Kong. The keynote speaker, Professor K.C. Chan, Secretary for Financial Services & the Treasury of the Hong Kong S.A.R. Government, discussed “Opportunities and Challenges for the Financial Service Sector.” In his keynote address, Professor Chan identified the primary causes of the recent volatility affecting international markets as: concern over the tapering of the asset purchasing program in the US; the liquidity crunch in China; and the sell-off in Portuguese government bonds as investors anticipate a debt-restructuring event.
Professor Chan stated that policy in China has the potential to benefit Hong Kong as it reins in shadow banking, implements structural reforms, and changes the economic model. He is bullish on the ability of China’s leadership to meet the challenges ahead. China’s strong track record and the liberalization of the capital account and capital markets will be a “win-win situation” for both Hong Kong and the Mainland. He highlighted the key role played by Hong Kong in China’s financial reform program, including the establishment of the H-share market and the listing of state-owned enterprises in Hong Kong.
Prof. K C Chan was appointed Secretary for Financial Services and the Treasury in July 2007. Before joining the Government, he held a number of public service positions including Director of the Hong Kong Futures Exchange and member of the Commission on Strategic Development. Up to 2007, Professor Chan was Dean of Business and Management in the Hong Kong University of Science and Technology (HKUST). Prior to joining the HKUST Business School in 1993, Professor Chan had spent nine years teaching at Ohio State University in the United States. He specialized in assets pricing, evaluation of trading strategies and market efficiency and has published numerous articles on these topics.
Thomas Fang Dongming is Greater China Sales Head and Asia Intermediary Sales Head at UBS's Equities Derivatives Sales team. Prior to undertaking his current role he was with Goldman Sachs as Head of Retail and Third Party sales team for all asset classes. Thomas Fang has a Bachelors degree in World Economy from Fudan University. He holds the CFA charter and an MBA from the Anderson School of Management at the University of California, Los Angeles.
Zheng (Michael) Song is Professor of Economics at the University of Chicago, Booth School of Business. Prior to joining Booth he served as Assistant Professor in the department of economics at the Chinese University of Hong Kong and as a research fellow in the school of economics at Fudan University in Shanghai, China. Song's research focus is macroeconomics, the Chinese economy, and political economy. His most recent publications includes "Growing like China", which was published in the American Economic Review.
Peter Stein is UBS AG's Head of Group Governmental Affairs, Asia Pacific. He advises senior management on regulatory changes and policy developments while supporting UBS's relationships with regulators and governments in Asia Pacific. Prior to joining UBS, he served as bureau chief for The Wall Street Journal in Hong Kong and managing editor of the Journal's Asian edition. He graduated from Yale University.
Chi-Won Yoon is CEO of UBS AG, Asia Pacific. Before, Mr. Yoon served in various senior positions within UBS, such as Head of UBS's securities business in Asia Pacific. Prior to joining UBS, he worked for Merrill Lynch in New York and for Lehman Brothers in New York and Hong Kong. Before embarking on a Wall Street career, he worked as an electrical engineer in satellite communications, and he holds university degrees in electrical engineering from the Massachusetts Institute of Technology (MIT) and in management from MIT's Sloan School of Management.
Fabrizio Zilibotti is the Tuntex Professor of International and Development Economics at Yale University. He was Professor of Macroeconomics and Political Economy at the Department of Economics at the University of Zurich and both Scientific Director and Deputy Director of the UBS International Center of Economics in Society. He is the President of the European Economic Association and co-editor at Econometrica. His research interests include economic growth and development, political economy, macro-economics, financial economics, and the Chinese economy.
Prof. K C Chan was appointed Secretary for Financial Services and the Treasury in July 2007. Before joining the Government, he held a number of public service positions including Director of the Hong Kong Futures Exchange and member of the Commission on Strategic Development. Up to 2007, Professor Chan was Dean of Business and Management in the Hong Kong University of Science and Technology (HKUST). Prior to joining the HKUST Business School in 1993, Professor Chan had spent nine years teaching at Ohio State University in the United States. He specialized in assets pricing, evaluation of trading strategies and market efficiency and has published numerous articles on these topics.
Thomas Fang Dongming is Greater China Sales Head and Asia Intermediary Sales Head at UBS's Equities Derivatives Sales team. Prior to undertaking his current role he was with Goldman Sachs as Head of Retail and Third Party sales team for all asset classes. Thomas Fang has a Bachelors degree in World Economy from Fudan University. He holds the CFA charter and an MBA from the Anderson School of Management at the University of California, Los Angeles.
Zheng (Michael) Song is Professor of Economics at the University of Chicago, Booth School of Business. Prior to joining Booth he served as Assistant Professor in the department of economics at the Chinese University of Hong Kong and as a research fellow in the school of economics at Fudan University in Shanghai, China. Song's research focus is macroeconomics, the Chinese economy, and political economy. His most recent publications includes "Growing like China", which was published in the American Economic Review.
Peter Stein is UBS AG's Head of Group Governmental Affairs, Asia Pacific. He advises senior management on regulatory changes and policy developments while supporting UBS's relationships with regulators and governments in Asia Pacific. Prior to joining UBS, he served as bureau chief for The Wall Street Journal in Hong Kong and managing editor of the Journal's Asian edition. He graduated from Yale University.