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Opinion | Hong Kong is ‘over’? These 7 strengths will keep its economy thriving
- The city must recognise its competitive advantages and work hard to maintain and improve them
- These include its financial stability, independent judicial system, clean and efficient government, free flow of capital, people and information, excellent education system, and talent diversity
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There has been much heated discussion about Hong Kong’s economy and its status as an international financial centre. A viral social media post last year describing Hong Kong as a “ruin” of a global hub and a recent op-ed pronouncing it to be “over” sparked much angst about the city’s future.
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Though many experts and scholars have had their say, the debate so far has missed the core issue of what Hong Kong must do to retain its global status. We believe that by maintaining and even strengthening seven of its competitive advantages, Hong Kong will never be “over”.
First, Hong Kong should maintain financial stability and strengthen the five pillars of its financial sector – namely the stock market, the bond market, banking, insurance and asset management. Hong Kong has world-class regulatory systems in the banking, security and insurance sectors. These strengths, together with our effective linked exchange rate system, helped mitigate the impact of the 2008 global financial crisis on the city.
While the stock market’s performance has been disappointing – the Hang Seng Index is now back to its 1997 level – the city has done very well in the other four pillars. Bonds issued in the first three quarters of 2023 reached US$507 billion, a 7 per cent growth year on year.
In the banking sector, about 70 of the world’s top 100 banks established subsidiaries in Hong Kong. Bank deposits grew by 5.1 per cent last year, recording a net inflow of funds.
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In the insurance sector, Hong Kong’s new policy premiums for long-term business in the first three quarters of 2023 amounted to US$19 billion, a 31 per cent year-on-year growth.
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