(June 22):  China is confident of Hong Kong’s future as an international financial center, and will support its growth, a senior Chinese regulator said on Monday, amid uncertainties cast by China’s proposed new security law for the city.

Fang Xinghai, vice chairman of the China Securities Regulatory Commission (CSRC) also told a forum that China should accelerate yuan internationalisation in the face of mounting risks associated with a U.S.-dominated global monetary system.

Fang’s remarks came amid heightened tensions between Beijing and Washington over issues including coronavirus, Hong Kong, and cross-border listings.

U.S. President Donald Trump has threatened to end preferential treatment for Hong Kong in response to a new security law pushed by Beijing, potentially undercutting the city’s status as a global financial center.

Xinhua news agency released details of the new law which will give China overarching powers over the enforcement of the law, which has alarmed pro-democracy activists and foreign governments.

Fang told the forum, organized by Chinese media Caixin and broadcast live, that “there shouldn’t be a whiff of pessimism” toward Hong Kong’s prospect as an international financial hub.

China supports the rollout of more financial derivatives in Hong Kong that are based on mainland-listed A-shares, so that global investors with China exposure can better hedge risks, Fang told the Caixin forum.

Chinese regulators are also supportive of plans by U.S.-listed Chinese companies to seek a “secondary listing” in Hong Kong, although such decisions are made by the companies themselves. The wave of such listings comes as U.S. regulators are moving to make U.S. flotations more difficult by Chinese companies.

Fang also called for stepped-up yuan internationalisation to help protect the value of China’s massive dollar assets overseas against the risk of the Federal Reserve seeking to solve domestic issues by printing too much greenback.

Other risks linked to a U.S.-dominated monetary system include possible restrictions on global payments by Chinese companies.

“Such a thing has happened to many Russian companies and financial institutions. So China has to save for the rainy days,” Fang said.