Hong Kong lawmakers are demanding that the jurisdiction’s government accelerate the pace of financial reforms and go further to help local financial professionals enter the many planned free-trade zones on the mainland,a report says.

Hong Kong lawmakers are demanding that the jurisdiction’s government accelerate the pace of financial reforms and go further to help local financial professionals enter the many planned free-trade zones in the mainland, according to the South China Morning Post.

They passed their views Secretary for Financial Services and the Treasury Chan Ka-keung, who briefed legislators yesterday in a meeting about the policy address, the publication said.

The report underlines the concerns that exist as Hong Kong faces potential competitive threats from the mainland, and of course it is a rival of the city-state of Singapore in wealth management as well. Last year, Hong Kong unveiled, for example, a new trust law structure to make itself more attractive as a jurisdiction. As concerns are raised about a slowing of the mainland’s economic growth rate, it has sharpened focus on how jurisdictions retain a competitive edge when financial “easy pickings” are less evident. To see an article about reform ideas in Hong Kong, click here.

Hong Kong accounts for about 80 per cent of all offshore RMB trading, and in total, financial services in Hong Kong accounted for more than HK$300 billion ($38.7 billion), or 16 per cent in value to gross domestic product in 2011 (the last year for which such data is available), making it the second biggest sector in the economy (source: The Financial Services Development Council). The sector employs over 228,000 people directly, as well as those in related industries such as the law, accountancy, transport and property. As of April this year, Hong Kong ranked third in Asia, behind Singapore and Japan, and fifth in the world, in total foreign exchange turnover with $275 billion of average daily net turnover (source: Bank for International Settlements). On the downside, Hong Kong's IPO market has a high reliance on the mainland - which could create a vulnerability if the mainland hits serious economic headwinds.

With such concerns in mind, lawmakers are anxious. "There are not many promises in the policy address to clearly say how the government would help local brokers and other financial professionals develop in the mainland market,'' Christopher Cheung Wah-fung, the lawmaker for the financial services sector, was quoted as saying in the article.

The mainland has introduced a free-trade zone in Shanghai, with possibly more to come in Guangdong and other cities.

"These free-trade zones would offer business opportunities for local financial firms and the Hong Kong government does not yet have any plans to help the firms develop in the mainland," Cheung was quoted by the SCMP as saying.

Chan said the government would carry out reforms to help the financial sector, the publication said, adding: "As the policy address indicated, the financial sector provides 230,000 jobs and contributes one-sixth of gross domestic product. A high quality financial services sector would enhance Hong Kong's competitiveness.”