Hong Kong's top finance executives bank on city to thrive as gateway to China
By Selena Li, Kane Wu and Julie Zhu
HONG KONG, June 27 (Reuters) - In 1997, the world watched as Britain returned Hong Kong to Chinese rule, with some pessimistic or wary about the outlook for the city and its role in the global financial system.
Twenty-five years later, Hong Kong has so far retained its status as a financial hub, and some of the city's top executives are banking on a bright future as the territory remains a crucial springboard for investment into mainland China.
Charles Li, former chief executive of bourse operator Hong Kong Exchanges and Clearing (HKEX) 0388.HK and founder of microfinance platform Micro Connect, said that although he believes the next 25 years will be "very different", he's optimistic.
"I'm convinced that the overall prosperity of Hong Kong will remain as strong as before because Hong Kong retains its value to both sides," Li told Reuters, referring to China and the West.
When he celebrated the handover with friends more than two decades ago in the city's bustling nightlife district of Lan Kwai Fong, Li said many people saw it as the "beginning of a very long ride, and the best is yet to come."
On Friday, Hong Kong reaches the halfway mark of a 50-year experiment designed to give the city a high degree of autonomy under Chinese rule.
Critics of the government say political and civil liberties have been hugely curtailed, especially since the introduction of a national security law in 2020.
The finance sector has thrived since the handover. The value of Hong Kong's stock market has surged to HK$27.65 trillion ($3.52 trillion) as of end-June, up from HK$3.2 trillion in 1997 and global investors have become increasingly reliant on Hong Kong to trade mainland stocks.
Turnover on the Hong Kong-Shanghai stock connect pipeline - which provides access to closely controlled mainland capital - jumped to 46.5 billion yuan on June 22, up from 12.8 billion yuan when it launched in 2014, according to data from HKEX.
On the Hong Kong-Shenzhen stock connect channel, turnover stands at about 58 billion yuan, up from 2.7 billion yuan at its launch in 2016.
Although uncertainty clouds the outlook for political and civil liberties under electoral changes and the sweeping national security law, other business executives say Hong Kong's standing as a financial hub will stay intact.
Some business lobby groups and diplomats have expressed concern over the outlook for Hong Kong, given an exodus of talent and worries over the rule of law and judicial independence.
"Hong Kong will remain indispensable, (and) also the most competitive gateway between China and the rest of the world," Fred Hu, founder and chairman of private equity group Primavera, told Reuters. "I don't believe any mainland city, including some cities I love, will bypass Hong Kong."
The city has contended for some of the world's hottest initial public offerings in recent years, including Alibaba, the New York-listed e-commerce titan, which journeyed to Hong Kong to raise $13 billion in a secondary listing in November 2019.
Hong Kong has been the world’s top stock exchange by IPO value seven times since the handover, most recently in 2019, when 146 companies raised a total of $40 billion on the main board, according to Dealogic data.
In a move that authorities say underscores the importance China attaches to Hong Kong, President Xi Jinping will attend the swearing in of the city's new leader, John Lee, on Friday as well as celebrations to mark the handover.
"I believe the central government's intention toward Hong Kong is benign. They don’t want to mess up Hong Kong," Hu said.
A former security chief who is sanctioned by the United States, Lee will be closely watched by a financial industry eager to get back on track after crippling COVID-19 restrictions that have triggered an exodus of people and seen the border with mainland China largely closed for two years.
David Chin, UBS' UBSG.S head of investment banking for Asia-Pacific, is optimistic on Hong Kong's outlook, although he says China's role on the global stage is key.
"Hong Kong is also the international gateway for China," he said. "So the foreign relationship, how China interacts with the rest of the world, is also very important for Hong Kong."
($1 = 7.8490 Hong Kong dollars)
Reporting By Selena Li, Kane Wu and Julie Zhu; Writing by Anne Marie Roantree; Editing by Gerry Doyle
Mga Kaugnay na Asset
Disclaimer: Ang mga kabilang sa XM Group ay nagbibigay lang ng serbisyo sa pagpapatupad at pag-access sa aming Online Trading Facility, kung saan pinapahintulutan nito ang pagtingin at/o paggamit sa nilalaman na makikita sa website o sa pamamagitan nito, at walang layuning palitan o palawigin ito, at hindi din ito papalitan o papalawigin. Ang naturang pag-access at paggamit ay palaging alinsunod sa: (i) Mga Tuntunin at Kundisyon; (ii) Mga Babala sa Risk; at (iii) Kabuuang Disclaimer. Kaya naman ang naturang nilalaman ay ituturing na pangkalahatang impormasyon lamang. Mangyaring isaalang-alang na ang mga nilalaman ng aming Online Trading Facility ay hindi paglikom, o alok, para magsagawa ng anumang transaksyon sa mga pinansyal na market. Ang pag-trade sa alinmang pinansyal na market ay nagtataglay ng mataas na lebel ng risk sa iyong kapital.
Lahat ng materyales na nakalathala sa aming Online Trading Facility ay nakalaan para sa layuning edukasyonal/pang-impormasyon lamang at hindi naglalaman – at hindi dapat ituring bilang naglalaman – ng payo at rekomendasyon na pangpinansyal, tungkol sa buwis sa pag-i-invest, o pang-trade, o tala ng aming presyo sa pag-trade, o alok para sa, o paglikom ng, transaksyon sa alinmang pinansyal na instrument o hindi ginustong pinansyal na promosyon.
Sa anumang nilalaman na galing sa ikatlong partido, pati na ang mga nilalaman na inihanda ng XM, ang mga naturang opinyon, balita, pananaliksik, pag-analisa, presyo, ibang impormasyon o link sa ibang mga site na makikita sa website na ito ay ibibigay tulad ng nandoon, bilang pangkalahatang komentaryo sa market at hindi ito nagtataglay ng payo sa pag-i-invest. Kung ang alinmang nilalaman nito ay itinuring bilang pananaliksik sa pag-i-invest, kailangan mong isaalang-alang at tanggapin na hindi ito inilaan at inihanda alinsunod sa mga legal na pangangailangan na idinisenyo para maisulong ang pagsasarili ng pananaliksik sa pag-i-invest, at dahil dito ituturing ito na komunikasyon sa marketing sa ilalim ng mga kaugnay na batas at regulasyon. Mangyaring siguruhin na nabasa at naintindihan mo ang aming Notipikasyon sa Hindi Independyenteng Pananaliksik sa Pag-i-invest at Babala sa Risk na may kinalaman sa impormasyong nakalagay sa itaas, na maa-access dito.