Occupy Central

Occupy Central 'may hurt Beijing's confidence in Hong Kong as financial centre'

Beijing may lose confidence in Hong Kong's role if protests spiral out of control, warns Joseph Yam, former head of the Monetary Authority

PUBLISHED : Monday, 21 July, 2014, 6:21am
UPDATED : Wednesday, 26 October, 2016, 2:38pm

Beijing's confidence in Hong Kong as a financial centre could be shattered if the Occupy Central protests spiral out of control, the former head of the Monetary Authority warned yesterday.

Joseph Yam Chi-kwong, who led the de facto central bank from 1993 to 2009, stopped short of saying state leaders would give up on the city should Occupy go ahead with its plan to block streets if the government fails to offer "genuine" democracy.

But he said it was "natural" for Beijing to work on a "Plan B", such as bolstering its drive to make Shanghai a financial hub.

"If [the protests] take only several days, then it will still be fine. But if the protests linger and reach a point [at which] the operations of the financial sector are affected, the risks will be much higher," said Yam, who is also an adviser to the People's Bank of China.

"I hope the [protests will] not affect people's confidence in the efficiency and sustainability of our financial sector.

"If the state leaders' confidence in Hong Kong is shaken, they might consider setting up another [financial] centre in other cities, like Shanghai.

"It is rather natural and reasonable for the central government to consider a Plan B. If you were [Premier] Li Keqiang , you would do the same," Yam said.

The anti-Occupy Central group, Alliance for Peace and Democracy, said yesterday it had collected about 380,000 signatures in the past two days against the civil disobedience campaign.

Concerns over Hong Kong's falling competitive edge have grown in recent years, with many Beijing loyalists heaping some of the blame on protests and a deadlock on electoral reform.

Last year Beijing moved a meeting of Asia-Pacific finance ministers from Hong Kong to the capital, widely seen as an attempt to avoid protests.

State leaders want to establish Shanghai as an international financial centre by 2020.

Yam was speaking at the Book Fair to promote his new book, Gui On Si Ngai, whose title literally means "the way to be safe is never to be secure".

Yam also said the Hong Kong dollar's peg to its US counterpart should not be considered untouchable as conditions now were very different to 1983, when it was created.

"China is now Hong Kong's biggest trade partner. Whether we should peg with the yuan is not something that cannot be studied," said Yam.

After the session, he said he believed the government had studied the possibility of dropping the peg.

Among the audience for Yam's session was his close friend, defeated chief executive hopeful Henry Tang Ying-yen.

The former chief secretary, now a member of the standing committee of the Chinese People's Political Consultative Conference, urged pan-democrats to compromise on electoral reform.