In his keynote address at the Asian Financial Forum on January 13, 2025, People’s Bank of China Governor Pan Gongsheng announced a significant policy shift aimed at bolstering China’s economic resilience and enhancing Hong Kong’s role as a global financial center. He emphasized the central bank’s commitment to increasing the allocation of China’s foreign exchange reserves in Hong Kong assets, a move designed to support the city’s financial development and broaden its future prospects. This strategy not only highlights China’s focus on strengthening domestic consumption but also a structural change in its approach to international finance, potentially positioning Hong Kong as a pivotal hub in a new “Asiadollar” system. Here are my thoughts on the implications.
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