Lee Bok-hyun meets with heads of Hong Kong and China financial authorities… "Cooperation for Capital Market Advancement"

Lee Bok-hyun, Governor of the Financial Supervisory Service, met with the heads of the financial supervisory authorities of Hong Kong and China to expand mutual exchanges to enhance the fairness of the capital market, expand disclosures, and activate the functions of the capital market.

According to the Financial Supervisory Service on the 17th, Governor Lee met with Julia Leung, CEO of the Hong Kong Securities and Futures Commission (SFC), in Hong Kong on the 14th, and on the 15th, he met with Wu Qing, Chairman of the China Securities Regulatory Commission (CSRC), and Xiao Yuanqi, Deputy Director of the National Financial Regulatory Administration (NFRA) of China.

Governor Lee and Deputy Director Xiao discussed potential risk factors that could affect the financial sector due to the intensifying global trade conflicts and agreed on the importance of the financial authorities' response to prevent risk transmission.

Deputy Director Xiao expressed concerns about the unpredictable external environment, such as the spread of global trade conflicts and economic slowdown concerns, and explained, "The Chinese government is responding to economic downside risks by promoting domestic demand and expanding investment in advanced industries such as artificial intelligence (AI), leveraging the characteristics of the Chinese economy, including a large domestic market."

Governor Lee introduced, "The Korean financial authorities are thoroughly preparing to monitor the ripple effects of external shocks on the financial market and to implement market stabilization measures in a timely manner if necessary," and Deputy Director Xiao emphasized, "The Chinese authorities are also actively responding to the possibility of financial instability, and given the loss absorption capacity of Chinese financial institutions, concerns about soundness are low."

The two institutions agreed to continue exchanges as the need for cooperation for regional financial stability between Korea and China, as neighboring countries, is significant.

Governor Lee also held meetings with the heads of the securities regulatory bodies of China and Hong Kong.

In the meeting with Chairman Wu Qing, they discussed the role of the supervisory authorities of both countries in enhancing the fairness of the capital market, expanding disclosures, and strengthening the supply of venture capital to activate the functions of the capital market.

Chairman Wu Qing explained, "Considering the characteristics of the Chinese market, where the proportion of individual investors is high, we are continuously promoting the expansion of disclosures, while inducing institutional investors to strengthen the functions of capital market activation, such as long-term equity investment and the expansion of venture capital supply."

Governor Lee expressed, "As there are many similarities in the capital market advancement policies being pursued by both countries, there is a great potential for mutual cooperation, and I hope for active exchanges in the future." Chairman Wu Qing also responded, "The Korean economy has a solid industrial base, such as semiconductors, and the Korean stock market also shows a generally favorable trend despite recent volatility," and suggested, "Let's cooperate for the development of the capital market."

In the meeting with CEO Julia Leung, they shared issues on the supervision of the capital markets of both countries and discussed the regulatory direction for sound financial innovation.

CEO Julia Leung diagnosed, "Despite the increase in volatility due to external factors such as mutual tariffs with the United States, the Hong Kong stock market is finding stability after a temporary shock."

She also stated, "I am well aware of Korea's efforts to improve the capital market, and Hong Kong has also been continuously striving to improve corporate governance over the past few years," and added, "Regarding the improvement of Korea's short selling system, we will actively support Hong Kong-based financial companies to fully comply with Korean regulations."

Governor Lee said, "Considering investor trust in the Korean capital market, we are operating short selling without interruption even in difficult market conditions," and thanked the SFC for its active cooperation in investigations related to global investment companies (IB).

The two heads shared recent trends in Hong Kong's virtual asset trading and regulation, such as the approval of Asia's first virtual asset spot exchange-traded fund (ETF), tokenized money market ETF, and the announcement of a virtual asset promotion roadmap, and agreed to closely cooperate on virtual asset supervision.

Jungdong Noh, Hankyung.com reporter dong2@hankyung.com