Han Xianwang, director of international business and chief economist of Hui Tianfu Fund, made the latest voice

China Fund News reporter Fang Li Qin Wei

In 2009, as one of the first overseas subsidiaries of Chinese fund companies to be approved, Hui Tianfu Asset Management (Hong Kong) Limited ("Hui Tianfu Hong Kong") took the first step in overseas layout.

In just three months, Hui Tianfu Hong Kong has obtained The Fourth (Advising on Securities) and Class 9 (Providing Asset Management) licences issued by the Securities and Futures Commission of Hong Kong, officially launched asset management and investment advisory business in Hong Kong, and subsequently obtained more qualifications, laying a solid foundation for today's international business territory.

Over the past 12 years, HuiTian Fu Hong Kong has seized the dividends of the times and policies, and its business has gradually expanded to multiple markets such as Taiwan, North Asia and Europe, taking into account the institutional and retail customer base. In August 2021, Hui Tianfu Asset Management (USA) Holdings Limited ("Hui Tianfu US"), the second overseas subsidiary of Hui Tianfu Fund, was officially established, marking a new level of Hui Tianfu's international layout. Now, the application for the establishment of a third overseas subsidiary, Huitianfu Singapore, is also actively advancing.

Looking back at the "from scratch, from having to strong" of international business, Han Xianwang, director of international business and chief economist of Hui Tianfu Fund, frankly said that the three-dimensional background of basing on Hong Kong, backed by the motherland and looking at the world is the basic advantage of all Chinese-funded institutions in Hong Kong, including Hui Tianfu Hong Kong, and Hui Tianfu Hong Kong is on this basis, grasping the policy dividends at each stage, continuously strengthening its own advantages, and using Hong Kong as a fulcrum to leverage the international market.

From start to finish

Comprehensive layout of overseas and cross-border products

China Fund News: Since its establishment in 2009, what is the overall business development status of HuiTian Fu Hong Kong? What has been achieved?

Han Xianwang: Hui Tianfu Hong Kong was officially incorporated in November 2009 and is wholly owned by the parent company Hui Tianfu Fund, and in February 2010, it obtained Type IV and Type 9 licenses issued by the Securities and Futures Commission of Hong Kong.

In order to meet the continuous development of our business and the needs of our investors, we have successively obtained RQFII (Renminbi Qualified Foreign Institutional Investor Qualification) and QFII (Qualified Foreign Institutional Investor Qualification), as well as a Type I (Securities Trading) license issued by the Hong Kong Securities and Futures Commission, a qualification approved by the Korean Financial Commission to carry out investment advisory business, and a qualification approved by the Asset Management Association of China to carry out Hong Kong stock investment advisory business.

Today, our business covers a wide range of markets including mainland China, Hong Kong, Taiwan, North Asia and Europe, taking into account institutional and retail customer bases, enriching the parent company's international footprint. In terms of product layout, we have issued and managed a number of public and private fund products in Hong Kong, Luxembourg and the Cayman Islands, including equities, bonds and private equity investment funds, and provided different investment opportunities and options for domestic and foreign investors through diversified cross-border investment channels such as QFII, RQFII and QDII.

At present, we have established an excellent investment team. At the same time, we have also become one of the overseas entrusted management institutions of the National Social Security Fund.

China Fund News: In the process of business development in the past ten years, what key policies or time nodes do you think have played an important role in the growth of the business?

Han Xianwang: In 2012, we became one of the first institutions to obtain RQFII pilot qualifications and became the first Hong Kong subsidiary of a Chinese-funded public fund to issue an RQFII RMB bond fund in Hong Kong. In 2013, the RQFII ETF fund was issued in Hong Kong, with an initial offering of more than 1 billion yuan. Since then, with the continuous opening and improvement of the policy system, we have also continuously upgraded our QFII and RQFII business, designed and issued a series of innovative products for overseas investors, which have had a wide impact on the industry and opened up an effective path for the sustainable development of the business.

RQFII not only provides a way for foreign investment in Assets in China, but also helps to establish an overseas RMB repatriation mechanism, become a RMB repatriation carrier, and promote the process of RMB internationalization. At the same time, RQFII promotes overseas funds to form a diversified investment strategy in the A-share and Chinese bond markets, and asset management institutions with Chinese backgrounds are also further improving their internationalization level with the attention and joint participation of foreign capital.

In recent years, the State Administration of Foreign Exchange has continuously deepened the reform of the QFII and RQFII related systems, including increasing the upper limit of the total amount, abolishing the restriction on the proportion of remittances and the lock-up period, which has greatly facilitated foreign investors to invest in the domestic financial market. The institutional reform and expansion of QFII and RQFII has greatly helped us to expand our international business in Hong Kong and other overseas markets.

In addition, since the opening of the Hong Kong Stock Connect in 2014, we can also use foreign capital to accelerate the entry into China's "Dongfeng" and rely on the "stock selection ability" recognized by the market to continuously expand the product innovation of cross-border investment such as Shanghai-Shenzhen-Hong Kong Stock Connect. At the same time, we are also actively expanding the outsourcing business of institutional investors in Hong Kong stocks, and have won the bid for social security and various large Chinese-funded insurance and banks, and the scale of asset management has grown steadily and rapidly, and we have successfully gained a firm foothold in the Hong Kong market with many international institutions.

China Fund News: Now, how is the synergy between the Hong Kong team and the parent company developing?

Han Xianwang: The parent company Hui Tianfu Fund took the lead in exploring and establishing a vertical integration management system for parent and subsidiary companies in the industry, covering investment research transactions, sales, middle and back office and other lines. This integrated operation and vertical management model of the two places can give full play to the complementary advantages of the resources of the two places and provide customers with a full range of services.

For example, under the vertically integrated investment research organizational structure, horizontally, hui tianfu's research team is managed in a unified manner; vertically, it has formed a number of advantageous industries, growth and value style groups, each group vertical management, from industry directors, to fund managers, to researchers, internal full discussion and sharing, the entire investment research team efficient collaboration.

Another example is the adoption of the vertical compliance management system of the parent and subsidiary in terms of compliance, the formulation of compliance management policies covering domestic and foreign subsidiaries, the leadership and supervision of the compliance management of subsidiaries, the strengthening of guidance in daily compliance management, and the strengthening of supervision and inspection of subsidiaries, and the improvement of subsidiary reporting mechanisms.

China Fund News: Based on Hong Kong, overseas business has now expanded to the United States and applied to set up a branch in Singapore, how is the current development of overseas business outside Hong Kong?

Han Xianwang: In August last year, after obtaining the approval of the China Securities Regulatory Commission, the second overseas subsidiary, HuiTianfu USA, was officially established, and now the core team has been completed and is fully promoting various processes and license applications, and the time is ripe to formally start business.

Hui Tianfu USA will be able to better serve institutional investors from all over the world, especially in North America, help Hui Tianfu further export and optimize the professional management capabilities of Chinese asset management institutions in the international market, and further guide overseas long-term funds to invest in China's capital market. On the other hand, Hui Tianfu will also use the global financial resources gathered by the United States to tap more investment opportunities from North American and global capital markets, and strive to better create benefits for customers while strengthening global diversification investment capabilities.

At present, the application for the establishment of the third overseas subsidiary, Hui Tianfu Singapore, is awaiting approval by the China Securities Regulatory Commission, and will mainly serve customers in the Pacific Rim and the Middle East, such as Singapore, Australia and Southeast Asia.

The next decade

The Hong Kong region focuses on three main areas

China Fund News: If you summarize it in one sentence, what do you think is the current positioning or advantage of Huitianfu Hong Kong?

Han Xianwang: Relying on the strong strength of the parent company Hui Tianfu Fund, it radiates greater China and North Asia, and actively cultivates the local and overseas markets in Hong Kong. We hope to build an excellent international team, while adhering to the long-term investment philosophy, giving full play to the advantages of Hui Tianfu Hong Kong as the first overseas investment center of Hui Tianfu, and comprehensively meeting the Chinese asset investment and allocation needs of domestic and foreign institutions and retail customers.

China Fund News: In the next decade, what is the overall development strategy of Huitianfu Hong Kong? What are the development plans for offshore business outside Hong Kong?

Han Xianwang: As an important component of the internationalization strategy of Hui Tianfu Fund, Hui Tianfu Hong Kong is an important platform for Hui Tianfu Fund to carry out cross-border business and cooperation. All along, Hui Tianfu Fund has been firmly promoting the internationalization strategy, giving full play to the synergy advantages of parent and subsidiary companies, and striving to build an international brand. Over the next decade, our business in Hong Kong will focus on three main areas.

The first is to continue to deepen the Hong Kong market and continue to understand customer needs. Since our inception, we have been striving to gain a deep understanding of the investment needs and preferences of local and overseas investors in Hong Kong, hoping to create the desired returns for investors under the premise of controlling risks through our in-depth understanding and accumulation of Chinese assets.

The second is to tap the diversified investment needs of Mainland institutional and retail customers in China. At present, the wealth management demand of mainland residents is strong, and asset allocation has gradually shifted from physical assets to financial assets, bringing new development opportunities and space to the asset management industry. Relying on the outstanding active management capabilities of Hui Tianfu Fund in terms of equity and fixed income, and with the Hong Kong team's understanding of overseas markets, we will continue to explore the diversified overseas allocation needs of Mainland investors and provide them with strategies and services that meet their investment risk appetite. At the same time, in the process of asset allocation diversification, it will also leverage the linkage between the two places to further enhance the ability to serve customers in an all-round way.

Finally, as the fulcrum of overseas business, it constantly explores business opportunities, gradually improves the layout of overseas and cross-border products from the actual needs, actively participates in the expansion of international business, and focuses on tapping the overseas diversified investment needs of domestic institutions and retail customers.

In the future, with the gradual implementation of the overall global layout strategic plan of Hui Tianfu Fund, Hui Tianfu Hong Kong will also strengthen its interaction with other overseas branches such as Hui Tianfu USA and Hui Tianfu Singapore.

More than a decade of rapids

The influence of Chinese-funded financial institutions in Hong Kong has increased significantly

China Fund News: Since entering the Hong Kong market in 2009, what major changes do you think the Hong Kong market has undergone in the past decade or so?

Han Xianwang: The characteristics of connecting China and foreign countries, and the combination of East and West make Hong Kong not only inclusive of an international metropolis, but also draw advantages from the comparison between China and foreign countries to create its own characteristics. Hong Kong is one of the world's leading financial, trade and shipping centers, and also the largest RMB offshore center, with the most basic advantages in carrying out international economic and trade and financial activities, and at the same time has the advantages of low tax system, perfect legal system, and many high-end professionals. Backed by the motherland and facing the world, this market has gained unique comprehensive advantages.

As the country changes and prospers with each passing day, the Hong Kong we see is also constantly and actively adjusting, changing and developing. For example, the number of Chinese-funded financial enterprises in Hong Kong and the scale of assets under management have increased significantly, and more and more Chinese banks, financial institutions, enterprises, law firms, accounting firms and other financial service providers can be seen in the core area of Hong Kong, and various financial industry associations have gradually been established.

With the gradual establishment of the brand image, the business ability and market influence of Chinese-funded institutions are increasing day by day, and it can now be said that they have been divided into hong Kong and foreign capital. Before and after Hong Kong's return to the motherland, the financial industry was basically dominated by foreign capital and Hong Kong capital, and at that time, the number of Chinese-funded financial institutions was small, the business volume was also small, and the status and voice of the Hong Kong market were still relatively weak. In the first 10 years of the 21st century, the number and business volume of Chinese-funded financial institutions continued to increase, and the impact began to increase, but it has not yet ushered in qualitative changes. In the second 10 years, with the advancement of national financial opening-up, the two-way flow of domestic and foreign funds has become more and more frequent, more Chinese-funded enterprises have effectively used the international market and international resources, and while the IPO in the Hong Kong market has continuously peaked, the influence of Chinese financial institutions has gradually increased.

The emergence of Chinese-funded enterprises has also brought changes to Hong Kong's capital market, and the number and market value of mainland enterprises listed on the Hong Kong Stock Exchange have been increasing, and the proportion of Chinese-funded shares has also increased. In 2018, the HkEx made the biggest reform of the listing system in 25 years, facilitating the listing of new economy companies in Hong Kong, such as innovative companies with different voting rights structures and biotechnology companies that have not yet achieved profitability. Benefiting from this reform, HKEX's business also set a number of new records in 2018.

With the opening up of the mainland financial market and the internationalization of the renminbi, Hong Kong's financial market has also taken on new responsibilities and become a global offshore renminbi business hub, international asset management center and risk management center, highlighting its irreplaceable role in the field of cross-border financial investment. In turn, Hong Kong has gradually developed and expanded its status as a global offshore RMB business hub, strengthened contacts and cooperation with mainland financial regulators and institutions, jointly launched an interconnection mechanism, and successively launched mechanisms such as Shanghai-Shenzhen-Hong Kong Stock Connect, Bond Connect and Guangdong-Hong Kong-Macao Greater Bay Area Wealth Management Connect, which also provided a safe and efficient channel for the opening up of the mainland financial market to the outside world. We can see that more and more Hong Kong residents are now working and settling in the Greater Bay Area, which has also expanded the living and employment space of Hong Kong residents, making the Greater Bay Area a vast hinterland of Hong Kong.

Although in recent years, the Hong Kong market has been continuously adversely affected by multiple factors such as the COVID-19 epidemic, the harsh economic environment, the disturbance of external forces and geopolitics. But we see that Hong Kong's overall economy is still growing, and its economy and financial system are resilient. In particular, Hong Kong's financial system is sound, local banks are in good financial shape and deposits have maintained growth, capital and liquidity levels are well above global standards, and loan quality and profitability are no less than those of their global counterparts.

Connectivity brings opportunities

Chinese-funded institutions are actively fighting against the wind outlet

China Fund News: You mentioned the various channels of interconnection between the Hong Kong market and the mainland market, what unique development opportunities do you think this interconnection brings to Chinese-funded institutions in Hong Kong?

Han Xianwang: The three-dimensional background of being based in Hong Kong, backed by the motherland and looking at the world is the basic advantage of all Chinese-funded institutions in Hong Kong.

Chinese-funded institutions have a comprehensive and in-depth understanding of mainland investors, the mainland and Hong Kong markets, and can do a good job in globalizing asset allocation for Chinese customers, while accelerating the internationalization of Chinese-funded institutions, and further promoting and promoting the stability and prosperity of the mainland and Hong Kong markets.

Chinese-funded institutions in Hong Kong are globally oriented, have an international perspective, and can integrate into the international market. In the process of national financial opening up, cross-border financial exchanges and interconnection, hong Kong will seize the development opportunities of the "Belt and Road" and the Guangdong-Hong Kong-Macao Greater Bay Area, and give full play to the advantages of offshore RMB hubs and green finance, And Chinese-funded institutions in Hong Kong will gain a broader space for development.

After years of development, Chinese-funded institutions in Hong Kong now not only have the ability and strength to undertake the overseas financial needs of Chinese-funded enterprises and mainland residents, but also be able to introduce the financial investment needs of overseas institutions and retail customers into China in accordance with international rules.

China Fund News: In your opinion, for financial institutions in Hong Kong, what new opportunities will the upcoming ETF pass bring to the market?

Han Xianwang: ETF Connect will contribute to the sustainable development of the ETF market in Hong Kong, the Mainland and even the Asia-Pacific region, which will help the different markets complement each other's advantages in product design, provide more investment options and opportunities for the market, strengthen the connection between Hong Kong and the mainland capital market, improve the interconnection of the whole chain product ecosystem, and further strengthen Hong Kong's position as an international financial center.

Hong Kong's ETF market is already one of the most diversified ETF markets in Asia, and the emergence of a new economy on the mainland will further enrich the breadth of ETF market products. For domestic and foreign retail investors, it is more convenient to enter the market that only some institutional investors can participate in, obtain different types of risk returns and share the dividends of China's economic growth. For institutional investors, on the basis of the QFII and QDII systems, there is a relatively simple investment method, and the existing Shanghai-Shenzhen-Hong Kong Stock Connect model also has an additional option.

Taking the MSCI A50 ETF as an example, this product focuses on the leading stocks in various industries in the Chinese economy, and the industry allocation is balanced, reflecting the growth of China's new economy and new industries. The product is now limited to domestic sales and trading. In the future, on the basis of meeting the regulatory conditions, foreign investors can directly invest in this fund under the Hong Kong-Shanghai Stock Connect, and international institutions and retail investors can directly participate, which is conducive to overseas investors to better allocate Chinese assets and share the growth opportunities of China's economy.

Hong Kong's "super contact" plays a big role

Give full play to the advantages of international financial centers

China Fund News: In addition to the interconnection mechanism, what major development opportunities do you think there are in the Hong Kong market?

Han Xianwang: All along, the Hong Kong market has been giving full play to its advantages as an international financial center, a global offshore RMB business hub and an international asset management center, and participating in the two-way opening up of the country.

It is believed that in the future, the interconnection between Hong Kong and the mainland market will continue to increase, further play its role as a "bridgehead" and "super contact", make full use of the mature rule system and interconnected institutional innovation, and help the process of national financial opening up. As the construction of the Guangdong-Hong Kong-Macao Greater Bay Area continues to advance, Hong Kong is expected to benefit in the long run, assume more responsibilities for connecting domestic and foreign financial markets, and become an important bridge for domestic capital to go out and overseas capital to enter in the new environment.

At the same time, due to the lower listing threshold and more flexible mechanism, the Hong Kong Stock Exchange is still the best choice for many innovative growth enterprises in the mainland to list, and changes in the geographical environment have also accelerated the pace of the return of Chinese stocks to Hong Kong for listing. The mutual promotion of interconnection and the return of Chinese stocks will further enhance the activity of the Hong Kong market, and various derivative businesses following IPOs and new share issuances will also become an important breakthrough area for Chinese securities companies, intermediaries and service institutions to expand their business in the Hong Kong market and even the world.

In addition, Hong Kong has made continuous efforts to promote the Belt and Road Initiative, green finance, digital economy, RMB internationalization, etc., better integrate into the overall situation of national development, and will surely inject unlimited vitality and huge growth space into Hong Kong's economic development, and the Pearl of the Orient will surely shine more.

China Fund News: As an export-oriented market, Hong Kong is vulnerable to the impact of the external situation, and risks such as the new crown epidemic and the Conflict between Russia and Ukraine have brought great fluctuations to the Hong Kong market, how do you view the future development prospects of the Hong Kong market?

Han Xianwang: Since the outbreak of the new crown epidemic and the Conflict between Russia and Ukraine, the economy, finance and business environment around the world have been challenged by major challenges. Although Hong Kong's economic and social operation is under pressure in the short term, thanks to the unique advantages of "one country, two systems" and the strong support of the state, Hong Kong's own mature financial market system, sound rule of law, rich pool of outstanding talents, and the promulgation and implementation of the National Security Law, the overall situation in Hong Kong remains stable and will surely come out of the haze in the future.

It is believed that Hong Kong will certainly grasp the opportunities of the country's new development pattern, continue to consolidate and give full play to the advantages of international financial centers, build an innovative technology and creative industry base, a global hub center, further open up to the inside and outside world, and give full play to the role of interconnection, the Belt and Road initiative, and the construction of the Guangdong-Hong Kong-Macao Greater Bay Area.

China Fund News: This year marks the 25th anniversary of Hong Kong's return to the motherland, what new competitive advantages do you think Hong Kong has established since its return to the motherland? What is the core competitiveness of the Current Hong Kong market?

Han Xianwang: Since the reversion, Hong Kong has made full use of the institutional advantages of "one country, two systems", backed by the huge scale of demand, talent, scientific research and funding in the mainland, and relying on the relatively unique economic and legal system to establish unique advantages and core competitiveness. At the same time, as the connection point between China and the world, Hong Kong has become a test field for the opening up of the mainland market, as well as an intermediary and exchange place between China and the world.

Relying on the country's economic rise, a new round of technological revolution, the expansion of the mainland market and the "Belt and Road" and other development opportunities, Hong Kong has given full play to its multiple advantages, which will help to actively cope with the challenges brought about by the scientific and technological revolution and the acceleration of the transformation and upgrading of the mainland by gathering innovative talents, improving innovation capabilities and reconstructing the industrial chain, and reach win-win cooperation with mainland cities.

In the future, Hong Kong's development can also consider "what the country needs and Hong Kong's strengths" to build new advantages. For example, give full play to its own advantages to assist countries in building a new model of international economic cooperation and promote the establishment of a more just, reasonable and forward-looking system of international standards and rules. In terms of green finance, social responsibility and digital finance, we can also build new advantages to enhance Hong Kong's comprehensive competitiveness as an international financial center, build a green financial center, drive the development of green industries, adapt to external regulatory changes such as ESG, and promote sustainable development.

EDIT: Captain

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