A couple of months ago, I was sitting at
a conference after I spoke and the panel was discussing whether Hong Kong could
become an international financial center on par of NYC and London. Afterwards,
some email me what I think of this question. I responded the following:
The only thing the panel really discusses
is how Hong Kong could serve China. China is a big fish, so just
China is a lot to feed. But with this
mentality, it hard to see HK become a real international financial center like
NYC and London. HK's financiers and government officials
generally do not have a grand view. British was making the decision for them.
Now, other than doing as little as they can, they are also largely influenced by
Beijing. So it is not surprising that HK cannot have the longer term view that
Singapore (SG) government might have. So if China slows down in the future (and
US recovers), HK will have a hard time. For SG, the bigger picture is much
better if they know how to play it. They are part of the China story, but they
are also part of India, and Southeast Asian stories, which probably will be the
next stories to unfold, except that no one knows the timing and catalyst.
For either
to become an international financial center rivaling NYC and London, another
battle they need to fight decisively is with Western countries and firms. For
now, most financial functions in Asia involve channeling money to North America
and Europe, instead of having the money to be managed in Asia. So they are just
satellite centers serving NYC and London. As long as this situation lasts,
there is no hope for them to become real international financial center. But I
do not see this happening any time soon. Even Asians or their governments are
not helping. If you do not believe it, look at all the capital flight from
Mainland China and the reason leading to that.
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