Hong Kong will focus on enhancing its core strengths rather than entering a race to outbid Singapore with generous tax breaks, as the rival Asian finance hubs compete for wealthy investors and global talent, according to the city’s finance chief, Paul Chan Mo-po.

“We do not want to race to the bottom, but at the same time we need to be competitive,” Chan said in an interview with Bloomberg TV on Wednesday.

Earlier this year, Hong Kong proposed tax breaks, including a broad expansion of tax exemptions on so-called carried interest — a share of investment profits that can mean big bucks for star fund managers. The move prompted Singapore to roll out similar incentives to maintain its appeal to fund managers.

Chan said the special administrative region government is working hard to implement the tax breaks “within this year.” He also touted the city’s access to the Chinese mainland market, availability of talent and quality of life, among its advantages over rival Singapore.

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Hong Kong is seeking to strengthen its position as a financial center while accelerating investment in technology under its new five-year plan, unveiled by Chief Executive John Lee Ka-chiu on Sept 16.

The financial secretary said the Northern Metropolis, the development area bordering the Chinese economic powerhouse of Shenzhen, will be a major engine of growth in the “next decade or two.”

He also defended the Hong Kong dollar’s long-term role as authorities promote wider use of the yuan, including in public expenditure, which he described as taking advantage of the lower costs of borrowing in the currency.

Chan said the government had “no intention” of changing its peg to the dollar.

On financial markets, he said attracting quality companies was the key to improving liquidity after a surge in initial public offerings. Further regulatory action would depend on market conditions, he said, while stressing that due diligence, credibility and investor confidence remained priorities.