Last week’s budget offered a reminder that despite the significant challenges of the pandemic, there are still opportunities to strengthen Hong Kong’s economic future, particularly when it comes to enhancing our status as a global financial centre.

Financial Secretary Paul Chan’s primary focus was, as it should have been, ensuring that Hong Kong’s commercial sector would not only survive the continuing disruption caused by the fifth wave of Covid-19, but bounce back as soon as restrictions are lifted.

It was particularly good to see that funds are being channelled into small and medium-sized enterprises (SMEs), which have been hard hit but remain the backbone of our local economy. These are the companies that are the nurseries of Hong Kong’s unique entrepreneurialism and make us who we are: every one that fails makes us all poorer.

Despite the huge challenge of containing the pandemic, we cannot afford to let it divert us from our preparations for the future. Unlike manufacturing, retail or hospitality, modern financial services can continue to grow in lockdown. The world will not stand still while we address our problems and we must make sure that we maintain the momentum that has for decades made Hong Kong the world’s most innovative and agile financial centre.

This year’s budget laid out what the government is doing to promote new growth. Special attention is being given to making capital markets deeper, more diverse and more efficient, including promoting Hong Kong as a global centre of green finance; fostering connectivity with the rest of China and the Greater Bay Area in particular; and realising the territory’s potential as a regional and global hub for the new economy.

It is welcome to see the government using this opportunity to take proactive measures to expand the “Connect” schemes, develop a local yield curve by issuing bonds with longer tenors, promote the use of renminbi, and accelerate plans to develop an electronic bond trading platform.

These developments will be particularly valuable when it comes to consolidating our position as a global centre for climate funding.

Green finance is a child of the digital age, and that presents a huge opportunity for Hong Kong even as we continue to fight the Omicron variant. Given the vast costs involved in mitigating the impacts of climate change and transitioning away from the high-carbon economy, particularly in Asia, Hong Kong has an opportunity to become the clearing house for international capital coming into the region.

The work the Hong Kong Monetary Authority has been doing, often in collaboration with institutions like the Bank for International Settlements, to position the city at the leading edge of green finance is starting to pay dividends. When taken in combination with the enormous need for green investment over the border in mainland China, we expect this opportunity will continue growing as we move towards “3060” – peak carbon by 2030 and carbon neutrality by 2060.

Much of the immediate focus of that financing is going to be in the Greater Bay Area. The area already has an economy larger than South Korea, and will remain the world’s most dynamic economic zone as Beijing focuses resources and research funds on the region as part of its plan to become more self-sufficient.

It was good to see the government actively seeking to boost connectivity with the Greater Bay Area in this budget, including working with mainland regulatory authorities to create a “network link-up” platform to pilot cross-border fintech and extend the utility of the three Connect schemes. That includes potentially expanding the quotas for the Wealth Management Connect scheme, a move that would not only make Hong Kong more attractive to mainlanders looking to diversify their asset portfolios, but also to regional players looking to buy into China’s success story.

We are facing some tough challenges, but we should not let them blind us to the opportunities that are out there. As last week’s budget unveiling shows, the government is both pushing the financial sector forward by backing it with investment, and pulling us forward by clearing regulatory hurdles to innovation.

Secretary Chan has laid the foundations, the rest us up to us in the commercial financial sector.