The aggressive moves by Beijing to support markets are speeding up plans for Hong Kong to come up with its own measures to revive activity of trading and initial public offerings. After working in the background since April, sounding out experts and regulators, Financial Secretary Paul Chan has fast-forwarded plans, according to people familiar with the matter.
China’s unexpected move to cut its stock trading tax is adding pressure on Hong Kong to follow suit, creating a dilemma for the city’s finance chief over the potential hit to government income.
Bankers and traders have long been asking for a reduction, but now Hong Kong’s biggest political party, the Democratic Alliance for the Betterment and Progress of Hong Kong, has joined the calls to revive trading in the Asian financial hub. The cost would be significant as the government relies on revenue from stock trading for about 9% of its budget.
