HK to become global player: FS

Updated: 2010-02-10 07:37

By George Ng(HK Edition)

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 HK to become global player: FS

Financial Secretary John Tsang, seen attending the DAB's Chinese New Year reception, believes Hong Kong will play a significant role in the next wave of financial globalization. Edmond Tang

Tsang identifies mainland ties as greatest competitive advantage

HONG KONG: Hong Kong will play a significant role in the next wave of financial globalization, Financial Secretary John Tsang said yesterday, citing its well-established system and connectivity to the emerging mainland.

Tsang was speaking in a forum in Hong Kong sponsored by investment bank Goldman Sachs.

"Now Hong Kong has a front-row seat for one of the next waves of financial globalization - the emergence of the developing world onto the stage of international finance," he spoke as he quoted a Time magazine article.

The city is gaining an edge over other financial centers in the region, thanks to several favorable factors, he said.

First of all, the city has a well-established financial system which has successfully withstood crises.

"We have proved our mettle as a robust and reliable financial center by pulling through the worst of the so-called Great Recession in relatively good shape," the finance chief said.

HK to become global player: FS

During the past financial turmoil, Hong Kong's financial markets remained stable and liquid, with the stock market remaining the seventh largest in the world and third largest in Asia by market capitalization.

The local equity market has shown its resilience by rebounding nearly 80 percent from its low in late 2008. It also became the world's largest IPO market last year, raising over HK$240 billion in new funds.

"We see huge opportunities in Hong Kong for emerging economies to leverage on our position as a capital-raising center," Tsang said.

The finance chief attributed the resilience of the city's financial market partly to "a significant dovetailing" of its financial system with that of the mainland.

Another favorable factor that will help Hong Kong gain a competitive edge is its connectivity with the mainland, the Financial Secretary said.

"Our connectivity with the mainland is our largest single competitive advantage," he said, while noting that "we are also well connected to other countries and regions."

The city has strengthened its role as the country's global financial center as well as a testing ground for the internationalization of the yuan with a raft of initiatives such as yuan bonds and yuan settlement for cross-boundary trades.

Meanwhile, the mainland economy is widely expected to be a driving force globally in the years ahead, with many economists saying that China is spearheading the shift of the global economic center of gravity to the East from the West.

"Hong Kong is a vantage point, actually the best available platform, for seeking out the best opportunities in China and throughout Asia," he said, citing its free and open investment environment, low taxes, rule of law, independent judiciary and free flow of capital.

(HK Edition 02/10/2010 page2)