Despite Hong Kong’s advantages, Chan is pessimistic about the future of Hong Kong as an international trade hub as the Mainland may further open its markets to foreign investors. “According to the trend of China’s development, the China market will inevitably become freer…How long can Hong Kong maintain its unique status as a financial centre?”
However, Thomas Chan Man-hung, head of the China Business Centre at the Hong Kong Polytechnic University, thinks China’s development will have a more benign impact on Hong Kong. “Without the cooperation with China, Hong Kong would have ‘died’ a long time ago,” says Chan.
Rather than being a threat to Hong Kong’s status as an international financial centre, Chan thinks the “China factor” is the number one reason for Hong Kong’s success.
Chan says the threats to Hong Kong’s economy are internal rather than external factors. He complains that Hong Kong’s young people are too inward-looking and resistant to learning from outside the city and that its financial services sector relies almost solely on the stock market. Chan suggests the Hong Kong government should promote bonds, insurance and fund investment services in order to attract more foreign investment.
Stephen Wong Yuan-shan, an adjunct associate professor at The Chinese University of Hong Kong, shares this view on the need to diversify Hong Kong’s financial sector. He says the stock market should not be “the only foot” in Hong Kong’s financial development.
“Singapore, Shanghai, Qianhai, Shenzhen and even London are major competitors to Hong Kong because Hong Kong’s financial market mainly relies on stocks, while London has a deeper and more international market,” he says. Like Chan, Wong also suggests developing the bond market.
However, for investment banker Vincent Chan, Hong Kong should not just concentrate on developing financial products and services. He thinks Hong Kong lags behind cities like Singapore when it comes to developing other industries such as e-commerce and financial technology. “Hong Kong is putting all its eggs in one basket,” Chan says.
For now, it may seem Hong Kong has not yet lost its lustre as an international financial centre but most commentators agree it should not rest on its laurels.
Edited by Total Lam