The mutual market access has expanded to foreign countries. The Financial Services Development Council: The market capitalization threshold of the Hang Seng Index poses obstacles, and plans to optimize the calculation mechanism

The new Chief Executive Officer of the Hong Kong Financial Development Council (FSDC), Dong Yiyue, stated in an interview that he is currently communicating with over 400 industry leaders to gather opinions, hoping to launch the second version of the capital market research report, which includes specific recommendations, by mid-year. He revealed that the key recommendations of the report include expanding the scope of the mutual market access to address technical operational issues involving international companies and exploring specific mechanisms to attract patient capital. On the 4th of this month, Dong Yiyue, who has just taken office, pointed out that the mutual market access mechanism has allowed the inclusion of international companies, but there are practical operational challenges for these companies to be included in the Hong Kong Stock Connect. The main issue is that many international companies are primarily listed in places like London or New York, and the rules for including Hang Seng Index constituent stocks only calculate the market value of the company's shares listed in Hong Kong, making it difficult for them to meet the market value requirements for inclusion in the Hang Seng Index and, consequently, to be included in the Hong Kong Stock Connect. He continued to say that the bureau is actively communicating with various stakeholders, including index companies, hoping to optimize the calculation mechanism to allow more international companies to be included in the Hong Kong Stock Connect, benefiting both international companies and allowing mainland investors to invest in quality overseas companies through secure mechanisms. He also mentioned that to attract more companies to list in Hong Kong for a secondary listing, it could be studied to include companies that meet the requirements for a secondary listing in Hong Kong into the Hong Kong Stock Connect. Bond Market as a Safe Haven Amid Stock Market Volatility The discussion in last year's report regarding attracting long-term "patient capital" has garnered widespread attention and response from the industry. Dong Yiyue pointed out that to promote relevant developments, the government could focus on developing the bond market, which can serve as a "safe haven" to stabilize capital flows during stock market volatility and prevent capital outflow to other regions. Regarding other financial recommendations, Dong Yiyue stated that the dual-class share structure in Hong Kong should be optimized as soon as possible. In the past, only about 30 such companies have been listed in Hong Kong, which is far lower than the proportion of similar companies listed in the U.S. market. As the importance of innovative elements in companies increases, Hong Kong may need to relax restrictions to meet the reasonable demands of tech company founders for control over their companies. In terms of external promotion, the FSDC will focus on the Indonesian market in the short term. Indonesia not only has a large population but also has a relatively mature Islamic finance sector, while Hong Kong has a comprehensive insurance system and financial infrastructure, allowing both sides to learn from each other in the financial field. He revealed that he is about to depart for Indonesia, marking his first business trip since taking office. The FSDC will also continue to pay attention to emerging and mature markets in the Middle East, Europe, and the United States, and will deepen cooperation through closed-door meetings and business matching. European and American Capital Gradually Returning to the Hong Kong Market, DeepSeek as a Turning Point When asked about the latest views of European and American investors on Hong Kong, Dong Yiyue said, "The investment enthusiasm of mature markets for Hong Kong has returned." He has observed that European and American capital is gradually flowing back into the Hong Kong market, with a noticeable trend of rapid capital return from Europe, especially after the turning point brought by the Chinese artificial intelligence startup DeepSeek in January 2025, which may make European investors realize that they may have underestimated the actual weight of the Chinese economy in recent years. Currently, China accounts for about 17% of global GDP, while the United States accounts for about 25%. However, this economic weight has been fully reflected in the investment allocations of European investors. Although there are still uncertainties, the current reactions from the European market suggest that they may have made adjustments to their deployments