Industry leaders convene at roundtable to chart SAR’s economic growth strategies for 2024 and beyond
Hong Kong, an international city known for its diverse and resilient financial sector, has faced a challenging external environment due to ongoing geopolitical tensions, tame inflation, and increased competition from emerging markets and other world financial centers.
Despite these obstacles, Hong Kong thrives under the “one country, two systems” principle, offering unique opportunities in green finance and fintech as potential growth drivers.
At the fourth edition of the China Daily Mastermind Roundtable, themed “Economic outlook 2024: Hong Kong’s role in the global financial market”, held on Tuesday, the city’s financial behemoths and technology luminaries shared their insights into the SAR’s financial future.
Organized by the China Daily Hong Kong Edition, the event serves as a platform for local leaders to address pressing issues and seek collaborative solutions.
READ MORE: The opinion leaders
In his opening speech, Zhou Li, deputy editor-in-chief of China Daily Group, publisher and editor-in-chief of China Daily Hong Kong, and chairman of Asia Leadership Roundtable, drew parallels between the city’s resilience in the face of adverse weather conditions and its ability to navigate economic challenges.
“In a world where economic cycles ebb and flow like today’s stormy seas, our city stands resilient, poised to harness the winds of change,” Zhou said. “Together, we will explore how Hong Kong can not only weather the global financial squalls but also emerge stronger, setting a beacon for 2024 and beyond.”
Liu Ningrong, associate vice-president of the University of Hong Kong and founding director of the university’s Institute for China Business, and the event moderator, said, “Hong Kong must develop Web3 technologies and provide the necessary infrastructure to support complex capital currency environments.
“So we must embrace new financial technologies like blockchain and cloud technologies” to establish the city as a world’s cryptocurrency center, he said.
Liu also highlighted Hong Kong’s chance to become a green finance hub, particularly with the government’s increased budget for promoting green finance.
The Hong Kong SAR government has issued over $25 billion worth of green bonds in multiple currencies and tenures since 2019, according to a speech made by Financial Secretary Paul Chan Mo-po in April. The finance chief also said Hong Kong has taken the lead in rolling out innovative products, such as issuing digital green bonds.
Cui Li, chief economist, managing director and head of macro research at CCB International Securities Ltd, said that Hong Kong should utilize its comparative advantages in financial services and expand its scope and reach.
Cui suggested that to broaden the Hong Kong market’s geographic coverage, one strategy is to “follow the customers”: Chinese mainland companies investing in ASEAN and beyond need fundraising and consultation in the international market, and the Hong Kong market is well positioned to provide the services and the platform. Moreover, deepening the city’s international bond market and growing the offshore renminbi market will enrich Hong Kong’s financial ecosystem, leveraging off Hong Kong’s free capital flows and currency convertibility, she said.
Chandran Nair, founder and CEO of the Global Institute For Tomorrow, argued that Hong Kong suffers from a deep-rooted parochialism and a lack of intellectual diversity, as the city’s elites — including government officials, business leaders, and academics — are promoting the same old ideas and failing to address the pressing social and economic issues facing the city.
“If you want to talk about the economy, it’s not the stock market, it is about the people, it is a social construct, and Hong Kong has no intellectual space for them,” Nair said. He called for more open and diverse intellectual discussions, warning that failure to address social inequalities could lead to unrest or a brain drain.
Xiao Geng, chairman of the Hong Kong Institution for International Finance, proposed a “super special economic zone” between Shenzhen and Hong Kong to help the city overcome its physical space and market constraints.
Under this plan, mainland residents can enter Hong Kong without going through customs, and vice versa. “If an overseas company can set up a place in the super special economic zone, it could also open another office in Shenzhen. The Shenzhen government can ask Hong Kong regulators to supervise the so-called second headquarters,” Xiao said.
Bill Condon, a member of global advisory board of MilleniumAssociates AG, identified growing geopolitical tensions with the United States and some European countries as one of Hong Kong’s most significant challenges. Condon argued that the long-term success of China, the Hong Kong SAR, and possibly other ASEAN nations and the Global South will depend on transitioning to an economic model based on traditional Asian principles focused on innovation and financial sustainability.
“Public-interest capitalism recognizes that long-term business success is closely aligned with the prosperity of the community and ecosystems in which corporations operate,” Condon said. “It emphasizes the role of government policy and regulation in shaping markets to ensure they serve the common good.”
Sally Wong, CEO of the Hong Kong Investment Funds Association, said, “Hong Kong’s unique value proposition lies in its superconnector role — the various Connect Schemes, which only Hong Kong can avail of, enables Hong Kong to serve as an important bridge to serve the investment and diversification needs of mainland and foreign investors. As China’s economic prowess increases and with more enhancements of the schemes, the importance of this role is only going to grow.”
Johnny Chan, chairman of Titan Works Ltd, highlighted the importance of people-to-people interactions in maintaining Hong Kong’s status as an international city.
He acknowledged that Hong Kong is in a transition period and faces challenges in integrating people from different backgrounds. “It is not only about the economy or the infrastructure. It is about people, how we are going to have organizations, and what that means for people to interact with each other and understand different cultures,” he said.
Paul Pong Po-lam, managing director of Pegasus Fund Managers Ltd, called for Hong Kong to attract more mainland investors and embrace innovation to maintain its position as a leading financial center.
“The mainland has about 280 trillion yuan ($38.64 trillion) in deposits, but only 0.4 percent is invested outside the country through the Qualified Domestic Institutional Investor program,” Pong said. “If we allow them to invest more, many people will want to bring their money out because interest rates and returns are low on the mainland. They want to diversify through ETFs and funds listed in HK for better returns. It will also improve the liquidity of the Hong Kong stock market and pave the way of better valuation for the IPOs listed in the city.”
Hu Yifan, regional chief investment officer and head macroeconomics APAC at UBS Global Wealth Management, mentioned the overseas expansion of mainland firms. Some Hong Kong enterprises are now leveraging their international expertise to “accompany” these firms going abroad, Hu said.
In this regard, “offer supply chain financing (services) could be a future trend (for Hong Kong), rather than sticking to the tree of international trade”, as the global trend slowdown has led to trade costs rising for Hong Kong, Hu added.
Albert Yip, chairman of Syndicate Capital Group — an international investment conglomerate — said that finance should not be equated with the economy. “When talking about the Hong Kong economy, we should not only focus on the financial market, and when addressing the financial market, we should not just focus on the IPO market. We should look at the entire economic system and structure.”
Concerning the Hong Kong economy, Yip stressed the significance of understanding Hong Kong’s DNA. He said it’s important for the city to fully appreciate its unique advantages and make comparisons with its past rather than “doing too much on” comparing itself to other financial centers. For instance, with the new virtual assets regime created by opening up the banking sector, Hong Kong has the unique DNA in the digital economy to position itself as a Web3 hub to connect the traditional banking with the creator economy in the region.
One aspect of Hong Kong’s DNA is its “professionalism”, a quality that has taken generations and years to cultivate, said Lin Ning, managing director of China International Capital Corp Hong Kong Asset Management Ltd.
Lin said that he has quite a number of recommendations on how to foster the growth of Hong Kong’s financial market. In particular, he emphasized the “trading center” aspect of the city, to increase the number of tradable assets; for example, carbon allowances that cover China as a whole.
Frank Fan, co-founder and regional CEO of Crystal Waters Global, a London-based property developer, shared his experiences as a Hong Kong person working on real estate projects in Europe. He praised Hong Kong’s international character, as one will have connections with clients from all over the world when having its establishment here.
Fan is not alone in perceiving the sentiment that Hong Kong’s economy is recovering. Based on the observation of Rudy Chan, venture partner of Cocoon Ignite Ventures, he said he has noticed that some members of his startup team who had moved to other financial centers over the past few years have returned to Hong Kong, which indicates that Hong Kong enjoys support from its people.
As a mentor at the Hong Kong University of Science and Technology’s entrepreneurship center, Chan, who is also the founder and CEO of EV Kommons Group Ltd, said he has seen an increasingly vibrant entrepreneurial spirit among students.
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Citing Financial Secretary Paul Chan Mo-po’s remarks on Monday that the Hong Kong Monetary Authority is developing a local green classification framework to facilitate consistent decision-making in green and transition investment, Zoe Lau, general manager and group head of the People and Sustainability Division at The Bank of East Asia, Ltd, pointed out that the government and monetary authority play significant roles as important stakeholders in developing green and sustainable finance in Hong Kong.
Wilson Kwok, vice-chairman at the Hong Kong Institute of Business Ethics & Sustainability, described the external environment in 2024 as a “roller coaster ride”, saying that most businesses should consider risk management.
This event was sponsored by The Peninsula Hong Kong, a renowned establishment with a 95-year history. Situated in bustling Tsim Sha Tsui, Kowloon, The Peninsula offers arts and cultural attractions, shopping venues, and a vibrant nightlife scene.
Moderator:
Prof Liu Ningrong, Associate Vice President, The University of Hong Kong; Founding Director, Institute for China Business, The University of Hong Kong
Guests:
Mr Johnny Chan, Chairman, Titan Works Ltd
Mr Rudy Chan, Venture Partner, Cocoon Ignite Ventures; Founder & CEO, EV Kommons Group Ltd
Mr Bill Condon, Member of Global Advisory Board, MilleniumAssociates AG
Dr Cui Li, Chief Economist, Managing Director & Head of Macro Research Division, CCB International Securities Ltd
Mr Frank Fan, Co-Founder and Regional CEO, Crystal Waters Global
Dr Hu Yifan, Regional Chief Investment Officer & Head Macroeconomics APAC, UBS Global Wealth Management
Mr Wilson C Kwok, Vice Chairman, IBES (Hong Kong Institute of Business Ethics & Sustainability Ltd)
Ms Zoe Lau, General Manager and Group Head of People and Sustainability Division, The Bank of East Asia, Ltd
Mr Lin Ning, Managing Director, China International Capital Corporation Hong Kong Asset Management Ltd
Mr Chandran Nair, Founder and CEO, Global Institute For Tomorrow
Mr Paul Pong Po-lam, Managing Director, Pegasus Fund Managers Ltd
Dr Ashley Wan, Regional Economist for East Asia and the Pacific, International Finance Corporation
Ms Sally Wong, Chief Executive Officer, Hong Kong Investment Funds Association
Prof Geng Xiao, Chairman, Hong Kong Institution for International Finance
Dr Albert Yip, Chairman, Syndicate Capital Group
Mr Jevy Leung, Assistant Director of Sales, The Peninsula Hong Kong
Mr Keith Zhou, Business Development Manager, The Peninsula Hong Kong
Contact the writers at tianyuanzhang@chinadailyhk.com
