A local family-run financial elite said earlier that Hong Kong’s status as an international financial center has been replaced by Singapore. He believes that some companies that use Hong Kong as the Asia-Pacific financial service center have left Hong Kong and may not return in the short term. Recently, these remarks that “Hong Kong has completely lost its status as a financial center” have become more and more vigorous, and they are “like layers”. People who don’t know enough about the financial industry will believe it when they hear more.
The Financial Secretary, Paul Chan, may be worried that a lot of delusions will turn into truth. Earlier on his blog, he said that the size of Hong Kong’s financial center has a significant advantage over Singapore. As Hong Kong develops and grows in the face of competition, we should not belittle ourselves or avoid our shortcomings. We only need to seek truth from facts and take targeted and effective countermeasures to further enhance the competitiveness of the financial market.
Chen Maobo listed some data to deny some vague impressions in the market, and it is worth citing in detail. He said that in 2020, the economic contribution of Hong Kong’s financial services market will be US$76 billion, while Singapore’s only US$49 billion, which is 1.5 times that of Singapore; the total market value of Hong Kong stocks last year was HK$42 trillion, 7 times higher than Singapore’s; Hong Kong listing There are 2,500 companies, which is 2.7 times higher than that of Singapore. The total turnover of Hong Kong stocks last year was 41 trillion Hong Kong dollars, while that of Singapore was only 1.9 trillion Hong Kong dollars. The turnover of Hong Kong stocks was more than 20 times higher than that of Singapore.
Chen Maobo also pointed out that Hong Kong is only inferior to Singapore in foreign exchange transactions, but Hong Kong is the largest overseas RMB hub. At the end of last year, total renminbi deposits in Hong Kong exceeded 900 billion yuan, accounting for about 60% of global offshore renminbi deposits.
After reading the information given by Cai Ye, the comparison of financial strength between Hong Kong and Singapore can be described at a glance. The financial elite said that Hong Kong’s status as an international financial center has been completely replaced by Singapore. He really doesn’t know where to start.
Since the beginning of this year, since Singapore has already “lyed down” and lifted all entry restrictions, and Hong Kong also implemented relatively strict entry restrictions a while ago, many foreign-funded institutions and their foreign employees in Hong Kong have been very concerned about Hong Kong’s anti-epidemic measures. There are many complaints about the arrangement, because their foreign employees will be subject to quarantine restrictions after returning to Hong Kong for business or family visits, which will indeed affect their work. This has also affected the overall impression of many financial practitioners on Hong Kong, dragging down the ratings and rankings of relevant surveys. However, these impressions cannot change the huge gap between Hong Kong and Singapore in the financial industry.
Even if some financial institutions move out of Hong Kong, move to Singapore or other places, it will not change the reality that they are chasing Hong Kong customers and speculating in Hong Kong stocks. The relocation of financial practitioners to other places does not mean that Hong Kong’s stock market and bond transactions will be lost, so don’t be deceived by vague feelings.
The most important thing in the financial market is liquidity, which affects the positions of large investors, whether they can buy or sell in a short period of time, or even conduct quantitative transactions. The turnover of the Hong Kong stock market last year of 41 trillion Hong Kong dollars alone, compared to Singapore’s only 1.9 trillion Hong Kong dollars, is simply “a cow and a mosquito spleen”, and it is not in the same order of magnitude to compare.
Looking into the future, Hong Kong has reduced the entry quarantine time to “0+3”. People returning to Hong Kong from other places do not need to be quarantined in hotels, they can return to work or even go out immediately, but they are not allowed to enter restaurants and bars for the first three days. This is very important for business people. Although there are still inconveniences, the impact should be minor.
In fact, the financial world should not only focus on what will happen in the next three months, but look farther, such as the next three years. After three years, will Singapore’s stock market capitalization and stock market turnover catch up with Hong Kong’s? Will Singapore’s bonds trade more than Hong Kong’s? If this is not the case, there is no need to worry that Hong Kong’s status as a financial center will be replaced by Singapore in the long run.
What Hong Kong should consider is, in the current international environment, as an international financial center outside the mainland, how can Hong Kong play this role well, and how, with the support of the state, can attract more business, including attracting more business from the United States. Listed Chinese companies have returned to Hong Kong to list, attracting investment in the West from countries along the Belt and Road, transferring some of them to Hong Kong, attracting foreign capital to invest in local RMB assets, and making the whole cake bigger.
Hong Kong’s elites are still worried that Singapore will steal Hong Kong’s business, and their eyes are too short-sighted. Singapore is not a competitive target for Hong Kong.
Lu Yongxiong
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