The financial industry is the backbone of Hong Kong's economy.
In order to revive the momentum of the international financial center, the International Financial Leaders Investment Summit hosted by the government last week is undoubtedly a grand event to promote Hong Kong's reopening to the world.
Coincidentally, the Hong Kong stock market has also rebounded significantly since the beginning of the week, and everything seems to be very peaceful, showing that Hong Kong is gradually returning to normal after the epidemic.
However, the development prospects of Hong Kong's financial industry are still affected by the haze such as the wrestling between China and the United States. It seems that after the summit, many people still questioned the results and believed that Hong Kong's financial advantages have been lost, which is indeed the bottom line of some Hong Kong people.
The status of a city's financial market cannot only be determined by one-sided factors.
The four major centers of development in the financial industry are the market, liquidity, regulation and talent.
As China's largest gateway to the outside world, Hong Kong is still very strong, with a huge market connecting the mainland and the world.
In recent years, China has actively opened up its financial market and promoted the internationalization of the RMB, using Hong Kong as a bridgehead to connect the world.
Hong Kong is the first choice for many mainland companies to list, and it is also the world's largest RMB clearing center. The mainland also issues government bonds in Hong Kong, and the China Securities Regulatory Commission is also studying the establishment of a government bond futures market in Hong Kong.
Recently, the Ministry of Foreign Affairs plans to set up an international mediation court in Hong Kong, which will be responsible for the increasing number of cross-border disputes besides litigation and arbitration.
Although this is not directly related to the financial market, it can be seen that Hong Kong has many unique advantages from the mainland, which other cities cannot beat Hong Kong.
Chief Executive Li Jiachao delivered a speech at the opening of the financial summit.
In addition, Hong Kong has a good reputation and infrastructure as a free port for capital, and the banking system and the linked exchange rate of the Hong Kong dollar are both healthy and stable.
The central government has repeatedly reiterated the continuity of "one country, two systems", which shows that Hong Kong's liquidity advantage will not disappear in the future, and international funds can be fully trusted to freely flow in and out of Hong Kong.
In addition, Hong Kong's financial industry regulatory system has been well established for many years. While ensuring the safety of the financial system, it does not impose too many restrictions on financial products. In addition, the tax rate is also competitive on a global scale. These advantages that Hong Kong has always had are actually have never disappeared.
As for talents, Hong Kong has indeed suffered a serious loss in recent years. Au Jinglin, CEO of the Financial Services Development Council, mentioned that the brain drain of the FSDC in 2021 will be more than 50%.
However, as Hong Kong gradually switches to the outside world, and the future development potential is still there, brain drain is not an insurmountable problem.
However, in the short term, the environment of Sino-US wrestling is unlikely to change, and Hong Kong may become a pain point for the US to attack China.
There is no guarantee that the United States will not impose more economic sanctions or investment restrictions on Hong Kong in order to counter China in the future, and may even use extreme measures similar to those used against Russia, including banning transactions in US dollars or kicking out SWIFT trading system, etc.
But this will also bet on the credibility of the US dollar, and from the effect of the US's current economic sanctions on Russia, it is not difficult to find that the US does not want to completely break up with China.
This is the result of a high degree of global financial integration, a fact that we cannot but recognize.
The advantages the mainland economy brings to Hong Kong will not change easily.
Hong Kong's financial industry should have a new development direction
This is not to deny the existence of political risk.
It is precisely because of this that the government must recognize the hidden worries of Hong Kong's financial development and actively improve it.
In July this year, the chairman of the Financial Services Development Council, Li Luren, pointed out that the strategic impact of strict epidemic prevention restrictions will be far-reaching and hinder the further development of Hong Kong, especially when other places continue to improve and expand the market, Hong Kong only focuses on financing business, and the size of the capital market will shrink.
The problem of Hong Kong's financial market strategy being narrow and under-expanded is not entirely due to the impact of the epidemic, but over-reliance on mainland funds and help in recent years.
It is absolutely correct to make good use of mainland funds and help, but officials should understand that Hong Kong's mission is to serve as a bridge between mainland and international funds, not to be a "giant baby" who is young and depends on mainland help.
If you only understand how to consume Hong Kong's natural advantages, give up more effective use and play to the advantages, and expand the development of the financial industry with the times, Hong Kong's financial industry will only stay stagnant and become an industry that "eats the old."
Excessive consumption of Hong Kong's natural advantages is also a major impediment to the development of new financial businesses and products.
In the past, policymakers have been reluctant to make progress, stifling the development of emerging models.
In 2013, Alibaba wanted to go public in the United States because of its refusal to "weight different rights".
The rise of blockchain technology in 2016, but the oversight of the HKMA was criticized as unfavorable to the development of financial technology. It was not until last Monday (October 31) that the authorities issued the "Policy Declaration on the Development of Virtual Assets in Hong Kong", proposing positive development. Virtual Asset Financial Services.
To make breakthroughs in the development of Hong Kong's financial industry, it is necessary to go beyond the existing safety net and provide more diversified financial services.
Although the financial development of the Mainland started later than Hong Kong, it has always emphasized that finance must serve the real economy and deepen the reform and opening up of the financial industry.
Pan Gongsheng, deputy governor of the People's Bank of China, emphasized at the press conference of the "20th National Congress of the Communist Party of China" that China will vigorously develop inclusive finance, green finance, technology finance and digital finance, so as to promote the healthy and stable development of the multi-level capital market.
Development Finance is not just about generating transaction volume
The central government specifically named these four areas of financial development, not just because of the popularity of transactions, which can create more transaction volume and make big money for the financial industry, but also because these areas have contributed to the real economy and are financial services with social value. Serve.
Politicians should not be bound by the existing concept that the financial industry is the development of transactions, nor should they be led by the interests of capital, but should think about how to use capital to develop the real economy.
The above-mentioned inclusive finance is an example. Finance is not just investment speculation, but also should be convenient for the people to help financial services better reach the common people.
For example, popularizing electronic payment and developing digital Hong Kong dollar as a substitute for daily transactions can reduce the cost of daily transactions, but Hong Kong still has a long way to go.
The Chief Executive of the Monetary Authority, Yu Weiwen, said that the enthusiastic response to the summit from the international and local financial communities was encouraging.
Green finance and tech finance is to help green and tech industries raise funds and accelerate research and progress in these areas.
The purpose of the former is to build a low-carbon society as soon as possible and accelerate carbon neutrality, which is of great significance to the future development of the world.
The latter helps technology companies grow, encourages the use of technology to improve productivity, break through production models, and create new demand, which is also of practical significance to the real economy.
Digital finance is a medium and a boost to help these financial development. Any form of new finance in the future must rely on the help of financial technology (FinTech), which is inseparable from digital finance.
The blockchain and digital goods mentioned above are also inseparable from new digital technologies.
In September this year, Singapore launched the "Blueprint for Financial Services Industry Transformation 2025", which advocates the digitization of financial infrastructure, green finance, and talent training.
The financial environment in Singapore and Hong Kong is very different, nor is it zero-sum competition.
What we need to do is not to take others as imaginary enemies and follow in the footsteps of others, but to recognize the direction of Hong Kong's financial transformation and actively take a new step.
The society has yet to see the government's blueprint for transformation, and the worries and even ridicule are not without reason.
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