Ken Chu

Opinion | Beijing’s support aside, Hong Kong must shine as a financial hub

The central government may have stepped in to defend markets but Hong Kong needs to show its ability to fend off regional challengers, such as by tapping its Middle East and belt and road connections

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Why you can trust SCMP

People walk past an electronic display showing the Hang Seng Index at Exchange Square in Central on January 17. The index’s plunge last week sent jitters through the market. Photo: Sun Yeung

Ken Chu

Published: 7:30pm, 29 Jan 2024Updated: 9:01pm, 29 Jan 2024

Over the past two years, Hong Kong’s stock and initial public offering markets have underperformed compared to global peers. Last week, the Hang Seng Index plunged below the psychological 15,000-point mark, sending jitters across the market.

Naysayers and those hostile to the mainland authorities and Hong Kong administration seized on the opportunity to peddle the story of a doomsday market crash. This has echoes of the “demise of Hong Kong” narrative painted by some before the 1997 handover. Fortunately, as has always been the case, the central government’s cavalry rode to the rescue.

After Beijing announced that it would lower the reserve requirement ratio for commercial banks and cut the relending and rediscount rate for some bank loans, the Hang Seng Index halted its fall and actually bounced back. This was yet another affirmation of my strong belief in the resilience of Hong Kong’s stock market and economy, especially after 1997 with the added, steadfast support of the central government.

We should not be swayed by rumours. Fluctuations in stock indices are normal, and there is no need to panic over every ebb and flow of the market. In other words, we should not be misled or deluded into believing that a market collapse is imminent unless there is concrete evidence to confirm a systemic downtrend and unstoppable downwards spiral.

Furthermore, Hong Kong will always have a ready buttress in the motherland. The China factor is here to stay and will continue to play a key role in our financial arena, as it has always done, as well as in our economy. We ought to have confidence that the central government will stand ready to throw us a lifeline.

Nonetheless, Hong Kong, as a premier financial hub, has to continue to empower and transform itself to fend off tough competition, especially from some new kids on the block such as Jakarta and Mumbai. We cannot rely solely on the central government to offer endless material support to shore up our financial industry. It is time that we showed Beijing and the world our ability and commitment to rise to the challenges and defend our status as a leading international financial hub.