NextFin News - Hong Kong Financial Secretary Paul Chan is making a case that cuts to the heart of China’s capital account problem: the city can absorb more mainland money, yet still convince Beijing that the flows remain manageable. That argument matters now because regulators on the mainland have been tightening scrutiny of offshore account openings even as Hong Kong pitches itself as the safest route for Chinese wealth.
Chan made the pitch in recent remarks tied to Hong Kong’s role as a cross-border financial hub, according to RTHK and local coverage of his comments. His message was familiar, but the timing is not. Hong Kong has just been presented with data showing it overtook Switzerland as the world’s largest cross-border wealth management centre in 2025, with about US$2.95 trillion of cross-border assets under management, slightly ahead of Switzerland’s US$2.946 trillion, according to Hong Kong Financial Secretary Paul Chan and a BCG report cited by Hong Kong Free Press. More than 60% of external capital into Hong Kong came from mainland China, underlining how dependent the city already is on the very flows Beijing still watches closely.
Chan is not a neutral commentator. He has spent years as Hong Kong’s financial chief arguing that the city’s role is to deepen links between mainland savings and global markets, while preserving enough discipline to keep regulators comfortable. That is a pro-integration line, and it has become more forceful as Hong Kong competes with Singapore and as mainland authorities push to channel wealth through approved routes rather than leak capital abroad. His bet is that a bigger, more orderly offshore pool in Hong Kong will make Beijing more, not less, willing to trust selective opening.
The appeal has some logic. China’s authorities have long preferred selective opening to a free capital account, using Hong Kong’s Stock Connect, Bond Connect and wealth management schemes as controlled valves. A city that handles the money without obvious disorder gives policymakers evidence that liberalization can be calibrated. But the recent crackdown cuts the other way. Hong Kong banks have tightened account-opening rules for mainland clients, and some branches have reportedly barred such openings altogether, according to the South China Morning Post. The message from Beijing is blunt: capital can move, but only on terms the state accepts.
That leaves Chan’s argument as a scenario, not a consensus view. It is backed by hard numbers on assets and fund flows, but not by any fresh signal that China is ready for broader liberalization. The stronger near-term force is caution, not easing. If mainland authorities believe Hong Kong helps police the border between onshore savings and offshore deployment, the city will keep its privileged place. If they conclude the city is a leak, the clamps will stay on. For now, the market is watching the same contradiction in real time: Hong Kong is being promoted as China’s financial gateway even as banks make it harder for mainland residents to step through the door.
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