Hong Kong’s top finance executives bank on city to thrive as gateway to China

HONG KONG, June 27 (Reuters) – In 1997, the planet viewed as Britain returned Hong Kong to Chinese rule, with some pessimistic or wary about the outlook for the city and its role in the world wide money method.

Twenty-five a long time afterwards, Hong Kong has so much retained its status as a monetary hub, and some of the city’s prime executives are banking on a shiny upcoming as the territory remains a vital springboard for investment 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, mentioned that even though he thinks the future 25 many years will be “incredibly different”, he’s optimistic.

“I am confident that the over-all prosperity of Hong Kong will continue to be as robust as just before due to the fact Hong Kong retains its benefit to both equally sides,” Li explained to Reuters, referring to China and the West.

When he celebrated the handover with friends more than two decades back in the city’s bustling nightlife district of Lan Kwai Fong, Li mentioned several people today observed it as the “beginning of a very very long experience, and the very best is but to occur.”

On Friday, Hong Kong reaches the halfway mark of a 50-yr experiment built to give the town a superior degree of autonomy below Chinese rule.

Critics of the federal government say political and civil liberties have been vastly curtailed, in particular because the introduction of a countrywide security regulation in 2020.

The finance sector has thrived since the handover. The benefit of Hong Kong’s inventory marketplace has surged to HK$27.65 trillion ($3.52 trillion) as of stop-June, up from HK$3.2 trillion in 1997 and world wide investors have turn into more and more reliant on Hong Kong to trade mainland shares.

Turnover on the Hong Kong-Shanghai inventory hook up pipeline – which gives access to closely 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 details 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 launch in 2016.

‘INDISPENSABLE’

Even though uncertainty clouds the outlook for political and civil liberties underneath electoral changes and the sweeping nationwide protection regulation, other enterprise executives say Hong Kong’s standing as a money hub will remain intact.

Some business enterprise foyer groups and diplomats have expressed problem more than the outlook for Hong Kong, provided an exodus of talent and worries over the rule of legislation and judicial independence.

“Hong Kong will continue being indispensable,
(and) also the most competitive gateway among China and the relaxation of the entire world,” Fred Hu, founder and chairman of non-public equity team Primavera, informed Reuters. “I never believe that any mainland town, including some metropolitan areas I adore, will bypass Hong Kong.”

The city has contended for some of the world’s best first general public choices in current yrs, including Alibaba, the New York-mentioned e-commerce titan, which journeyed to Hong Kong to raise $13 billion in a secondary listing in November 2019.

Hong Kong has been the world’s prime stock exchange by IPO value seven instances considering the fact that the handover, most not too long ago in 2019, when 146 corporations elevated a whole of $40 billion on the key board, in accordance to Dealogic info.

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

“I imagine the central government’s intention towards Hong Kong is benign. They do not want to mess up Hong Kong,” Hu explained.

A previous safety main who is sanctioned by the United States, Lee will be closely watched by a economic market eager to get again on observe after crippling COVID-19 limits that have induced an exodus of folks and noticed the border with mainland China mainly closed for two several years.

David Chin, UBS’ (UBSG.S) head of financial investment banking for Asia-Pacific, is optimistic on Hong Kong’s outlook, even though he claims China’s position on the world phase is crucial.

“Hong Kong is also the global gateway for China,” he explained. “So the international romantic relationship, how China interacts with the relaxation of the entire world, is also very significant for Hong Kong.”

($1 = 7.8490 Hong Kong bucks)

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

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