Hong Kong’s transformation of its financial role will further strengthen the city’s international status, enabling it to edge closer to being the world’s top financial center, Frederic Neumann, chief Asia economist of HSBC Global Investment Research, said on Tuesday.

He sees the special administrative region making a “fundamental shift” in its capacity as a global financial pivot.

“Initially, Hong Kong’s task was to bring international capital to the Chinese mainland. But that’s happening less and less. What’s happening now is we’re bringing mainland capital to the world. That’s a new model for Hong Kong,” Neumann told China Daily in an interview in Shenzhen.

He said more money is being poured into the SAR by mainland institutions and individuals, leading to the growth in the city’s private wealth, insurance and equity markets.

According to the Asset and Wealth Management Activities Survey released by Hong Kong’s Securities and Futures Commission, total assets under management in the city had reached HK$35 trillion ($4.48 trillion) by the end of last year -- a 13-percent year-on-year increase. The private banking and private wealth management sector saw particularly remarkable growth, with AUM having gone up 15 percent on a yearly basis, and net fund inflows amounting to HK$384 billion.

Hong Kong’s stock market also performed well. Over HK$100 billion in funds were raised through initial public offerings in the financial hub in the first half of this year, making the city the top IPO market worldwide.

“Previously, a global company would go to New York or London to borrow money. Now, they can come to Hong Kong to raise funds because there’s Chinese mainland money they can borrow from,” Neumann said.

The senior economist believes Hong Kong’s status as a world financial hub will be further strengthened if the new model continues to develop, enabling it to “get closer to the role of New York”.

According to the latest Global Financial Centres Index published jointly by UK-based Z/Yen and the Shenzhen-based China Development Institute in March, Hong Kong came in third in the global financial center rankings after New York and London. The SAR’s overall score with the top world financial center had narrowed from that in September last year. The ranking also placed Hong Kong as Asia’s top financial center, ahead of Singapore.

Addressing concerns that Hong Kong is losing its competitiveness to Singapore as professionals and jobs had moved to the city state during the COVID-19 pandemic, Neumann said that trend has “actually stopped”.

“Hong Kong remains a far larger financial center than Singapore in terms of AUM and private wealth. It can offer certain things the Lion City can’t offer, such as access to the Chinese mainland,” he said.

Singapore, meanwhile, excels in financing Southeast Asia and Oceania, he added.

“I don’t think the idea that Singapore will ‘eat Hong Kong’s lunch’ is going to happen. Both will develop their own niches.”

Contact the writer at sally@chinadailyhk.com