In a talk to some of the top financial executives around the globe on Wednesday, Hong Kong’s leader John Lee emphasised the city’s relationship with China in an effort to repair the COVID-damaged territory’s reputation as a significant financial centre.
The city will keep striving to abolish COVID restrictions, Chief Executive Lee stated at the Global Financial Leaders’ Investments Summit hosted by the Hong Kong Monetary Authority.
The conference is the largest business gathering to take place in the area since Hong Kong closed its borders in the year 2020 and implemented rolling restrictions to fight COVID-19. These actions have severely hurt its economy and caused a talent exodus.
For the first time in nearly three years, some of the top banking executives in the world, including James Gorman of Morgan Stanley (MS.N) and David Solomon of Goldman Sachs (GS.N), are in Hong Kong for the summit.
The conference comes as global financial businesses operating in Hong Kong and China deal with US-China tensions and a skills shortage in what is dubbed “Asia’s world city,” which poses a significant obstacle.
Lee told the about 250 summit attendees, the majority of whom were local financial professionals, that Hong Kong continues to be the only place on the planet where the global benefit and the China benefit meet in a single city.
Hong Kong serves as the only unbreakable link between the mainland and the remainder of the world as a result of this singular convergence.
Eddie Yue, chief executive of Hong Kong Monetary Authority (HKMA), the city’s de facto central bank, claimed that the reopening of Hong Kong presents exciting growth potential for individuals and financial organisations all over the world.
And maybe more significantly, Hong Kong will keep pushing for global stability, expansion, and sustainability.
Aside from the rigorous COVID regulations, anti-government demonstrations in 2019 and the implementation of a comprehensive national security law a year later have cast doubt on Hong Kong’s future as a leading financial hub.
In response to a significant brain drain that has occurred in the previous three years as a result of the pandemic rules, Lee claimed that Hong Kong is attempting to attract top talent.
He told the conference that while Hong Kong has experienced ups and downs over the years, like many other large cities throughout the world, its resiliency is still strikingly unmatched.
In order to access the second-largest economy in the world and its trillion-dollar financial markets, international financial institutions have long bet on Hong Kong as a doorway to China.
Fang Xinghai, vice chairman of the China Securities Regulatory Commission (CSRC), stated at the summit that Hong Kong was a “very, very important” financial hub for China.
He claimed that the government wanted more foreign businesses to list in Hong Kong in order to expand the capital markets there.
According to data from Refinitiv, Hong Kong’s new share listings are valued $10.77 billion thus far in 2022, the smallest level since 2017. At this time last year, they were worth $37.7 billion.
This year, investors throughout the world are facing a number of difficulties, including the Russia-Ukraine war, inflationary pressures, skyrocketing energy prices, and tightening interest rates, all of which are hurting risk appetite.
Solomon from Goldman Sachs warned the summit that it would take approximately six quarters for the economy to “rebalance” during a time of turbulence.
As 2023 approaches, there is still a considerable level of uncertainty, he noted. In the upcoming quarters, I predict that the equilibrium will become more balanced.
The geopolitical situation that is unfolding between major countries, according to Blackstone’s (BX.N) chief executive financial officer Michael Chae, is an increasing concern for the entire world.
The prospect of escalating tensions throughout the globe that can pose significant threats to instability is what keeps me up at night, he said.
The high rate of inflation, according to Gorman of Morgan Stanley, is the largest risk the globe is now facing. Investors ought to keep an eye out for any such “liquidity squeezes” in the international markets.
