Jake's View | Too soon for Hong Kong to fear yuan free zones
Beijing's talk of taking down financial wall only in select cities shows how half-baked its plan is
Beijing's experiment with freer transfer of the yuan in Shanghai and Qianhai could spell the end of Hong Kong's pre-eminent role as China's international financial centre, analysts warn.
Once again, my faith in that phrase "analysts say" or, in this case, "analysts warn" has been confirmed. When you hear it, put your money down the other way.
This initiative by Beijing to select two mainland cities for a trial opening of the capital account on the balance of payments is not a threat to Hong Kong as a financial services centre, but an assurance that there are still many years to go before such a threat will materialise.
Of course, I may be a little ahead of the game in making this pronouncement. Before pontificating on what effect these free zones will have on Hong Kong, one must first be clear on what will be allowed inside them. Just what will they constitute?
And, alas, this remains uncertain. Qianhai at present consists of a vast expanse of mud and Shanghai of a vast resentment that Hong Kong should ever have presumed to a role ordained by heaven as Shanghai's alone. Little more is yet evident.