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 viewed as Britain returned Hong Kong to Chinese rule, with some pessimistic or cautious about the outlook for the metropolis and its function in the world-wide economic method.

20-five several years later, Hong Kong has so far retained its status as a financial hub, and some of the city’s top rated executives are banking on a vibrant foreseeable future as the territory continues to be a crucial springboard for expenditure into mainland China.

Charles Li, previous chief government of bourse operator Hong Kong Exchanges and Clearing (HKEX) 0388.HK and founder of microfinance platform Micro Hook up, explained that while he thinks the up coming 25 several years will be “incredibly distinct”, he is optimistic.

“I’m confident that the overall prosperity of Hong Kong will stay as sturdy as prior to because Hong Kong retains its worth to each sides,” Li explained to Reuters, referring to China and the West.

When he celebrated the handover with close friends extra than two a long time in the past in the city’s bustling nightlife district of Lan Kwai Fong, Li claimed several folks saw it as the “commencing of a really extended journey, and the ideal is still to arrive.”

On Friday, Hong Kong reaches the midway mark of a 50-12 months experiment created to give the town a high diploma of autonomy less than Chinese rule.

Critics of the govt say political and civil liberties have been massively curtailed, specially due to the fact the introduction of a nationwide security regulation in 2020.

The finance sector has thrived given that the handover. The value of Hong Kong’s inventory marketplace has surged to HK$27.65 trillion ($3.52 trillion) as of conclude-June, up from HK$3.2 trillion in 1997 and world-wide traders have come to be ever more reliant on Hong Kong to trade mainland shares.

Turnover on the Hong Kong-Shanghai inventory connect pipeline – which presents entry to carefully managed mainland funds – jumped to 46.5 billion yuan on June 22, up from 12.8 billion yuan when it released in 2014, in accordance to information from HKEX.

On the Hong Kong-Shenzhen stock hook up channel, turnover stands at about 58 billion yuan, up from 2.7 billion yuan at its start in 2016.

‘INDISPENSABLE’

Whilst uncertainty clouds the outlook for political and civil liberties beneath electoral alterations and the sweeping national safety law, other small business executives say Hong Kong’s standing as a economic hub will continue to be intact.

Some business enterprise lobby groups and diplomats have expressed concern over the outlook for Hong Kong, specified an exodus of talent and concerns around the rule of legislation and judicial independence.

“Hong Kong will remain indispensable, (and) also the most competitive gateway involving China and the relaxation of the globe,” Fred Hu, founder and chairman of non-public fairness team Primavera, informed Reuters. “I do not believe that any mainland metropolis, like some metropolitan areas I like, will bypass Hong Kong.”

The city has contended for some of the world’s best preliminary community offerings in modern many years, like Alibaba, the New York-shown e-commerce titan, which journeyed to Hong Kong to elevate $13 billion in a secondary listing in November 2019.

Hong Kong has been the world’s leading inventory exchange by IPO value 7 moments because the handover, most just lately in 2019, when 146 firms raised a complete of $40 billion on the primary board, according to Dealogic information.

In a move that authorities say underscores the great importance China attaches to Hong Kong, President Xi Jinping will go to the swearing in of the city’s new chief, John Lee, on Friday as effectively as celebrations to mark the handover.

“I think the central government’s intention toward Hong Kong is benign. They really don’t want to mess up Hong Kong,” Hu mentioned.

A previous protection main who is sanctioned by the United States, Lee will be carefully watched by a money industry eager to get again on keep track of right after crippling COVID-19 restrictions that have triggered an exodus of persons and noticed the border with mainland China mostly closed for two yrs.

David Chin, UBS’ UBSG.S head of expenditure banking for Asia-Pacific, is optimistic on Hong Kong’s outlook, though he says China’s part on the world wide stage is key.

“Hong Kong is also the intercontinental gateway for China,” he said. “So the international romantic relationship, how China interacts with the relaxation of the earth, is also quite critical for Hong Kong.”

($1 = 7.8490 Hong Kong bucks)

(Reporting By Selena Li, Kane Wu and Julie Zhu Composing by Anne Marie Roantree Enhancing by Gerry Doyle)

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