Hong Kong announces plans to recover Financial Hub Status
Hong Kong’s Financial Secretary, Paul Chan Mo-po, has revealed measures which are intended to encourage the establishment of private equity funds to fundraise for Shenzhen technology start-ups, in the hopes of attracting an increasing number of family offices to Hong Kong.
According to Chan Mo-po, by attracting both family offices and private equity funds to Hong Kong, the financial sector of the city will be able to capitalise on the opportunity presented, as it would crucially contribute to the development of the Greater Bay Area.
The initiative has been unveiled amidst the political instability plaguing the city, with a Reuters report revealing that a number of wealth managers have scrapped their plans to pursue operations in Hong Kong.
Hong Kong is also potentially threatened by the ongoing trade disputes between the USA and China, with the city historically acting as a re-export hub between the two countries; 17% of goods exported from China to the USA pass through the city, with a value of USD7.6 billion, according to a figure released by the Hong Kong government, as published in a report by the South China Morning Post.
Carrie Lam, the Chief Executive of Hong Kong, added to Chan Mo-po statements, revealing her confidence in the perseverance and growth of the Hong Kong financial sector. She pointed to the stability of the exchange rate of the HKD, and the functionality of the banking and financial markets.
Lam also defended the credit rating of Hong Kong, stating that “The rule of law and free flow of capital and talent have not been affected by the recent incidents,” thus challenging Fitch Ratings’ decision to lower the city’s rating from AA+ to AA, with the Global credit rating agency threatening to reduce Hong Kong’s rating further due to the fact that “its outlook for Hong Kong's ratings has turned negative.”
Lam added that “The government has learned a lesson from the social events over the last two months. We will listen to different sectors to improve the economy and the society." The city was further impacted by the overtaking of the Hong Kong Exchanges and Clearing, which was previously the world’s largest initial public offering market, by the New York Stock Exchange and Nasdaq.