A critical review of the financial development council's study
During their brainstorming, the [financial services development] council defined five areas of study, according to the council chairwoman. These include finding opportunities in the mainland, promoting the financial services industry overseas, training talent, further developing the financial sector and encouraging new and innovative businesses.
SCMP, January 23
I assume, of course, that these five are in addition to the principal area of study, namely the relative merits of the Chateaubriand and the Chateau Medoc in the sorts of restaurants that one might expect a financial services council to frequent.
I can think of no reason why anyone should wish to quibble with this obvious purpose although someone had better hurry up to raise the money for it. But let us examine the other five purposes:
Finding opportunities in the mainland. It's not so much a matter of finding them as being granted them. If Beijing prohibits ordinary citizens of China from buying Hong Kong listed equities then it doesn't matter how many willing buyers the council can find in the mainland.
And if Beijing does grant them access to our market we will not need the council to find the opportunity. This newspaper will trumpet the news immediately. Every dealing room in town will know all about it in minutes. Every investment bank lawyer will have combed through the fine details before the council members have ordered dessert.
I suspect, however, that the council will do what its model, the Trade Development Council has done, which is not so much sell Hong Kong to the mainland as sell the mainland to or through Hong Kong. Let no one say that if the mainland gets the benefit, the mainland can jolly well pay for it, too. Hush now! This is a fine patriotic objective.
Promoting the financial services industry overseas. What financial services industry? The stockbroking industry is quite different from the insurance industry. There is no one industry in financial services. There are hundreds of different activities.
And what makes anyone in the council think that he or she can do a better job than Hong Kong stockbrokers of promoting Hong Kong stocks abroad? I myself did it for many years as a stockbroker and I didn't cost anyone but my employers a cent. I pride myself that I did it quite well, too. I had that slave master, the company profit and loss account, driving me on.
As in stockbroking, so in ship leasing or in trade finance. Tens of thousands of Hong Kong people are busy promoting these services abroad every day, and they do it better than any government-appointed council.
Training talent. I have the same objection. Training an insurance underwriter won't get you a stockbroker and, anyway, I can't think of a better place to train a stockbroker than the domestic equities desk of a dealing room. It offers the best teachers, the best classroom and the best lesson plan.
No, I lie. At some level of business stockbrokers find themselves taking their clients to dinner. I am sure the council will soon have worthwhile input on making a good impression in a fancy restaurant.
Further developing the financial sector. This sounds to me as though the chairwoman said the council should have five objectives but the members were all stumped after they got to three.
Encouraging new and innovative businesses. And then someone remembered that no one had yet mentioned innovation. It's a requirement in government talk shops. Whew, how convenient. We now have our five objectives, the English mustard, please.
But spare me innovation in stockbroking. When I place a buy order with my broker, I want him to get that stock at the best price possible, lodge it securely, and bother me with no back office screw ups. That's the good old way and I want no innovations to it, thank you.
What Hong Kong needs to attract financial services is rule of law, low taxes, a restrained regulatory environment and congenial working and living circumstances. Nurture these and the financiers will come of their own in droves. They will even fill restaurants as fully as a financial services council can do.