Hong Kong's status as an international financial center is not based on the "induction" of the United States

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Written by: Commentary Editing Room

2020-08-07 14:00

In an interview with Fox News on Wednesday (5th), US President Trump stated that after Hong Kong loses its special treatment status granted by the US, it will not be a successful securities trading place, and the US securities trading business will increase accordingly. However, these remarks not only reflect his bragging nature, but also show his ignorance of the operation of financial markets. In the face of aggressive pressure from Washington, the SAR government must not only consolidate the advantages of Hong Kong’s financial industry, but also actively explore and absorb international capital to prepare for the decoupling of the Sino-US economy.

In a recent visit, Trump mentioned that after the United States abolished Hong Kong's special treatment status, it will help absorb funds from international companies and investors and transfer them to US exchanges. Trump said, "We gave them (Hong Kong) great incentives... They took away huge business from the New York Stock Exchange, the Nasdaq, and all of our exchanges." But "we have now With everything brought back, Hong Kong will no longer be a successful trading center...We have to make a lot of money now.”

Trump: Bringing the deal back to the US

First of all, business has always been mutually beneficial. How can the US government give benefits to others in vain? Granting Hong Kong special treatment in business is an arrangement that the United States also benefits itself. Furthermore, as pointed out by the Financial Services and the Treasury Bureau, Hong Kong’s advantages include a regulatory system and infrastructure that are in line with the international market, and abundant human resources. Why does Trump take credit? And he did not explain why the status of Hong Kong's trading center and the U.S. exchange have a trade-off relationship.

Of course, in the current Sino-US relations, Hong Kong, as the gateway to China, will inevitably be affected. However, the measures taken by the United States will not necessarily weaken Hong Kong's status as a financial center. First, because of the "Holding Foreign Companies Accountable Act" passed by the U.S. Senate in May, the authorities have the right to prohibit a certain stock transaction if a foreign company has not been reviewed by the U.S. Supervisory Authority for three consecutive years. Although this move was ostensibly caused by Luckin Coffee’s financial fraud, in the climate of pan-politicization of Sino-US economic and trade activities, it has long been regarded by many companies as a precursor to the “weaponization” of the law. Chinese companies listed in the U.S., such as Baidu, Sina, and Ctrip, are considering privatization and withdrawing from the U.S. market, seeking to return to Hong Kong or Shanghai for listing. As a large number of Chinese companies intend to return, the business of securities firms and brokerages will naturally be greatly reduced, and it will be difficult to restore the glory of the US exchange.

According to statistics, Sino-US relations deteriorated rapidly in the second half of the year, and it did not have much impact on Hong Kong's financial market. As of July, the average daily turnover of Hong Kong's financial market was HK$124.8 billion, an increase of over 40% over the same period last year, and the amount of initial public offerings (IPO) raised was as high as HK$132.1 billion. In addition, according to the international accounting firm KPMG, even though the economy in the first half of the year was plagued by the epidemic, the funds raised by the Hong Kong stock exchange still rank among the top three in the world with the US Nasdaq and Shanghai Stock Exchange, not inferior to it. , Not to mention the tendency of Trump's remarks to come true.

The Hong Kong government must actively prepare for war

Instead, Trump is eager to threaten that international funds will return to the United States, which shows the lack of knowledge. Even if the "Hong Kong Policy Law" is revoked, it will undoubtedly affect the status of Hong Kong's re-export port and the transformation of new technology industries. However, Hong Kong can become an international financial city. In the final analysis, Hong Kong has a good legal system, professional service personnel and supporting facilities. , Financial infrastructure, and other advantages gained through their hard work, instead of relying on the "induction" of the United States to break the ground in the Asia-Pacific region.

Even though a large number of Chinese companies intend to return to the market, they will definitely add vitality to Hong Kong’s financial market in the future. However, the Hong Kong government needs to consolidate its international advantages and reputation, complete the process of listing approval, and gradually deprive the Chinese and American economies. When the global industrial chain is resetting, we will actively attract investment and attract companies from emerging countries to come to Hong Kong for listing. In addition, just like the recent plan to establish a sustainable and green exchange "STAGE" by the Hong Kong Stock Exchange and the launch of Asian and emerging market index futures and options products, this will enable the Hong Kong Stock Exchange to accelerate its pace of service diversification and introduce more Multiple asset classes and product types turn crises into opportunities.

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