HK leader John Lee touts ‘China advantage’ to rebuild city’s image as financial hub

Mr John Lee also said Hong Kong was working to attract top talent to offset a major brain drain due to Covid-19 rules. PHOTO: AFP

HONG KONG – Hong Kong leader John Lee on Wednesday pitched the city’s connection with China in an address to some of the world’s top financial executives, as he strives to rebuild the Chinese territory’s Covid-19-hit image as a major financial hub.

Mr Lee, the Chief Executive, told the Hong Kong Monetary Authority’s Global Financial Leaders’ Investment Summit that the city would continue working towards lifting Covid-19 restrictions.

The conference is the biggest corporate event in the city since Hong Kong shut its borders in 2020 and put in place rolling restrictions to combat Covid-19. Those measures have badly hit its economy and resulted in an exodus of talent.

Some of the world’s biggest banking bosses, including Goldman Sachs’ chief executive David Solomon and Morgan Stanley’s Mr James Gorman, are in Hong Kong for the first time in almost three years for the meeting.

For foreign financial firms operating in China and Hong Kong, the meeting comes as they navigate tensions between the United States and China while a depleting pool of talent in what is touted as “Asia’s world city” is creating a major challenge.

“Hong Kong remains the only place in the world where the global advantage and the China advantage come together in a single city,” Mr Lee told about 250 participants, mostly local financial executives. “This unique convergence makes Hong Kong the irreplaceable connection between the mainland and the rest of the world.”

He said that Hong Kong was working to attract top talent to offset a major brain drain seen in the past three years due to the pandemic rules.

“As have many other major cities worldwide, Hong Kong has been through ups and downs over the years, but our resilience remains remarkably unmatched,” he told the meeting.

Mr Eddie Yue, chief executive of the city’s de facto central bank Hong Kong Monetary Authority, said the reopening of Hong Kong brings exciting growth opportunities for talented workers and financial institutions around the world.

“And more importantly, Hong Kong will continue to contribute to the wider global agenda of stability, growth, and sustainability,” he said.

Global financial institutions have for long bet on Hong Kong as a gateway to China, to tap the world’s second-largest economy and its trillions of dollars worth of financial markets.

In pre-recorded interviews for the conference, China’s top regulatory officials on Wednesday also pledged their support to Hong Kong and said reforms and liberalisation would continue in China to attract foreign investors.

Hong Kong was a “very, very important” financial centre for China, China Securities Regulatory Commission vice-chairman Fang Xinghai told the meeting.

The authorities, he said, were keen for more international companies to list in Hong Kong to grow the city’s capital markets activities.

Hong Kong’s new share listings are worth US$10.77 billion (S$15.2 billion) so far in 2022, the lowest level since 2017, compared with US$37.7 billion at the same time last year, according to Refinitiv figures.

Global investors are grappling with several challenges this year, with the Russia-Ukraine war, rising inflation, soaring energy prices and tightening interest rates all hammering risk appetite.

Goldman Sach’s Mr Solomon told the conference it could take up to six quarters for the world to “rebalance” after a period of uncertainty.

“There’s still a significant amount of uncertainty as we get into 2023,” he said. “My expectation is that equilibrium will come more into balance in the coming quarters.”

Blackstone’s chief financial officer, Mr Michael Chae, said that the geopolitical situation playing out between major economies was a growing risk facing the world.

“What keeps me up is the possibility of rising tensions around the world that could lead to serious threats to instability,” he said.

Morgan Stanley’s Mr Gorman said the biggest risk the world currently faced was the high level of inflation, and investors need to carefully watch for “liquidity squeezes” in global markets. REUTERS

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