Hong Kong Positioned for Strong Future

Hong Kong continues to position itself to capitalize on Mainland China’s steadily growing economic liberalization and globalization. This was the message delivered by the Hong Kong Government’s Principal Economist, Ms Elley Mao, to a number of audiences in Ontario in August.

Ms Mao joined former Governor of the Bank of Canada, Mr John Crow, and Chief Economist of the National Bank Financial, Mr Clement Gignac, at a two-day forum, “Coming down the track – International financial influences on Canada’s outlook, in Toronto. 

She also briefed a roundtable of representatives from major banks, financial institutions, law firms and think tank C.D. Howe Institute, addressed senior policy advisors of the Ontario Government and delivered a keynote speech at the 2005 Economic Outlook/Policy Forum of the Canadian Association for Business Economics in Kingston. 

Ms Mao told her listeners that Hong Kong’s gateway status to China is no longer exclusive, presenting fresh opportunities and challenges. “To ensure that Hong Kong can stay competitive and continue to clinch a close partnership relation with the Mainland, it has to re-orientate and broaden its role to meet the changing needs of Mainland China,” she said.

Hong Kong’s sound legal system, well regulated markets, and good knowledge of modern management principles, international business standards and codes of behaviour are advantages that position Hong Kong to assist China to establish a “rule-based” market system to replace the past “relationship-based” practice. 

She added that the opening up of China’s service industry brings rising needs for more sophisticated financial intermediation services, where, Hong Kong becomes a conduit of “quality” capital to stay competitive and ahead of other foreign investors in China. 

“More than 300 Mainland enterprises are listed in the Hong Kong Stock Exchange and they together account for about 30% of the total market capitalization value. 

“Moreover, listing in Hong Kong put these enterprises under the supervision of the Hong Kong authorities, and indirectly should help improve governance and elevate management standards in these enterprises,” Ms Mao explained. 

She said the Hong Kong Stock Exchange ranked first in Asia and fourth in the world in terms of capital raised, and about 36 per cent of Hong Kong’s stock market turnover was generated by international investors. 

As a financial market, Ms Mao said that Hong Kong offers unrivaled competitive edge in liquidity, talents, knowledge, international experience, corporate governance, transparency and property rights in Asia. More multinational companies – now totalling more than 3,600 – have chosen Hong Kong as their regional headquarters and offices.

Being seen by the Mainland Chinese enterprises as “a window to the world”, Hong Kong’s free flow of funds and information, freely convertible currency, and cross-cultural lifestyle are the major attractions to foreign companies and expatriates, concluded Ms Mao.

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