In a talk to some of the top financial executives on Wednesday, Hong Kong’s leader, John Lee, emphasised the city’s ties to China in an effort to repair the COVID-damaged territory’s reputation as a significant financial centre.
The city would keep striving to abolish COVID-19 restrictions, Chief Executive Lee stated at the Global Financial Leaders’ Investment Summit hosted by the Hong Kong Monetary Authority.
Considering that Hong Kong closed its borders in 2020 and implemented rolling limitations to fight the epidemic, the conference is the largest corporate event there. These actions caused a talent exodus and severely hurt the economy.
Related: Hong Kong wants to let people buy and sell cryptocurrencies in stores.
For the first time in over three years, some of the top bankers in the world, including James Gorman of Morgan Stanley (NYSE:MS) and David Solomon of Goldman Sachs (NYSE:GS), are in Hong Kong for the summit.
The gathering comes as global financial companies operating in China and Hong Kong negotiate tensions between the United States and China. Another significant issue is the shrinking pool of talent in Hong Kong, which is frequently referred to as “Asia’s international city.”
Lee told the approximately 250 summit attendees, the majority of whom were regional finance executives, that “Hong Kong continues to be the only place in the world where the global advantage and the Chinese advantage come together in a single city.”
Because of this singular convergence, Hong Kong serves as the only permanent link between the mainland and the rest of the world.
Eddie Yue, chief executive of the Hong Kong Monetary Authority (HKMA), the city’s de facto central bank, claimed that the reopening of Hong Kong presents exciting growth potential for individuals and financial organisations all over the world.
Aside from the rigorous COVID regulations, anti-government protests in 2019 and the implementation of a comprehensive national security law a year later have cast doubt on Hong Kong’s future as a leading financial hub.
In response to the significant brain drain that has occurred in the previous three years as a result of the pandemic rules, Lee claimed that Hong Kong is attempting to attract top talent.
“Hong Kong has seen ups and downs throughout the years, just like many other large cities around the world, but our endurance remains amazingly unmatched,” he said during the conference.
BUDGET CENTRE
In order to access the second-largest economy in the world and its trillion-dollar financial markets, international financial institutions have long bet on Hong Kong as a gateway to China.
Foreign financial institutions with sizable onshore operations in China include Goldman, Morgan Stanley, HSBC, and Standard Chartered (OTC:SCBFF).
Fang Xinghai, vice chairman of the China Securities Regulatory Commission (CSRC), stated at the summit that Hong Kong was a “very, very important” financial hub for China.
He claimed that authorities wanted to see more foreign businesses list in Hong Kong in order to expand their operations in the capital market there.
Related: Hong Kong stocks drop because Xi’s appointments make people worry about the economy, and the yuan gets weaker.
According to data from Refinitiv, Hong Kong’s new share listings have been valued at $10.77 billion so far in 2022, the lowest level since 2017. At this time last year, they were worth $37.7 billion.
This year, investors throughout the world are facing a number of difficulties, including the Russia-Ukraine war, rising inflation, skyrocketing energy prices, and tightening interest rates, all of which are hurting risk appetite.
Solomon from Goldman Sachs warned the summit that it would take up to six quarters for the world to “rebalance” during a time of turbulence.
As 2023 approaches, “there’s still a considerable level of uncertainty,” he declared. I predict that equilibrium will become more balanced in the upcoming quarters.
The geopolitical situation that is unfolding between major countries, according to Blackstone’s (NYSE:BX) Chief Financial Officer Michael Chae, is an increasing concern for the entire world.
The prospect of escalating tensions worldwide that might pose significant threats to instability, he said, “keeps me up at night.”
According to Gorman of Morgan Stanley, the high rate of inflation is the largest risk the world is now facing.
Colm Kelleher, the chairman of UBS Group, stated that the bank was eagerly awaiting the next step in China’s pandemic response, which is regarded as the strictest in the world.
Even for a tiny number of positive cases, China has continued to apply lockdowns as part of its zero-COVID approach, whereas the rest of the world has transitioned towards loosening practically all restrictions.
“We are waiting to see what will happen when COVID is zero and China opens up,” he remarked.