…But falls down telling the story
Hong Kong has emerged top in
the World Economic Forum's index of financial market development, surpassing
the United States and United Kingdom from the highest rankings for the first
time, making it the first Asian financial center to lead the 60-country index, according
to the Forum's fourth annual Financial Development Report released last week.
So that's great news for Hong
Kong, the most developed financial market in the world. And implicitly, the
most competitive? But Hong Kong should know better than to be complacent. No
doubt the territory has benefited from the Big Brother in the north but I am,
as usual, concerned. Here's one recent example.
I found myself dozing off at a
conference in Zurich early last month, called “Hong Kong: China’s Global
Financial Centre” hosted by the HKMA, InvestHK and the SFC primarily to promote
Hong Kong as the premier offshore renminbi trading center and an international
asset management center.
It may be a good way to promote
Hong Kong. After all, Hong Kong is often dubbed the number one IPO center of
the world, is fast becoming the leading financing market for world mineral and
exploration companies and a major hedge fund center among other attributes
listed in the glossy brochures given out at the conference.
Most important, Hong Kong is
the first offshore renminbi business center to launch investment products
denominated and cleared in the Chinese currency. Banks in Hong Kong handle more
than 80 percent of the cross-border renminbi trade, tagged at RMB597 billion
(or 10 percent of mainland China’s total merchandise trade) at the second
quarter this year, on the backdrop of a fast expanding renminbi trade
settlement scheme. Hong Kong is the also first city outside of mainland China
that has developed a bond market denominated in the Chinese currency.
With such ammunition stacked to
impress the roughly 100 financially-savvy Swiss in attendance at the Marriott
Hotel in downtown Zurich, eager to get updates on the latest developments in
Greater China, I would have bet my mortgage that it would have really got them
moving. I was wrong.
From where I was sitting, at
the back of the hall, I could see a very bored and restless audience. You
couldn’t blame them. The panelists on stage were not only unable to capitalize
on the territory’s strong points and impress the audience with the “Hong Kong
advantage” but were so carried away that they literally talked among themselves
and totally alienated the audience – those taking quick notes on the floor
initially began taking more interest in their BlackBerrys and iPhones.
After the panel realized they
had spoken too long amongst themselves, the audience dragged through the
shortened question-and-answer session to the point of embarrassment for having
no question asked. Somehow, three eventually came and one stood out.
The question goes something
like: Has Hong Kong lost its competitiveness given that some Chinese mainland
companies have recently chosen to list in Germany and Switzerland instead?
An anticipated and easy
question to handle, I thought. Wrong again.
The panel struggled, exchanged
looks with the head table searching for support and finally the answer came
from one panelist on stage.
“Hong Kong is a free market”
and you know the rest of the usual spin and unconvincing hot-air response.
I am still deeply disturbed by
what I witnessed. Surely, there were several ways to handle this supposedly
often-cited query but that wasn’t even the issue of the day.
The core underlying concern is
that Hong Kong needs China and the support of Beijing. Hong Kong has been heavily
reliant on mainland China, even though it has many indisputable and
unparalleled advantages to showcase to the world. I bet this was obvious even
to the Swiss audience in Zurich that day, even those with little or no
familiarity with Hong Kong.
Hong Kong has hollowed out its
manufacturing capabilities - economists are often hard-pressed these days to
produce a list of things actually produced in Hong Kong - but what remains of
its strengths, like the strong legal system, a world financial center, regional
logistics hub, free flow of information, etc , will be increasingly dependent
on China.
The InvestHK web site has a
corporate video to promote “Hong Kong Advantages”. It comes across as a
textbook-styled list of bullet points of hot air without any material substance
or facts to back up – and I lost count of the number of times the word “free”
was emphasized throughout the video but anyone residing in Hong Kong long
enough will recognize how meaningless that has become in recent years. And the Financial
Services section of the web site is not even updated, boasting data dated to
only 2009.
So while the going is still
good, it saddened me that an occasion like the recent Zurich conference comes
across as a (or another?) lost opportunity.
Hong Kong has been enjoying all
these freebies from China. One day it may become the parasite of China, one
attendee told me privately during the intermission. I cannot help wondering if
Hong Kong has become complacent.
Vanson Soo
Asia Sentinel
(Vanson Soo runs an independent
business intelligence practice specialized in the Greater China region. This
appeared simultaneously in The Standard of Hong Kong. Email: soovans@gmail.com)
Business & Investment Opportunities
YourVietnamExpert is a division of Saigon Business Corporation Pte Ltd, Incorporated in Singapore since 1994. As Your Business Companion, we propose a range of services in Consulting, Investment and Management, focusing three main economic sectors: International PR; Healthcare & Wellness;and Tourism & Hospitality. We also propose Higher Education, as a bridge between educational structures and industries, by supporting international programs. Sign up with twitter to get news updates with @SaigonBusinessC. Thanks.
No comments:
Post a Comment