Hong Kong national security law (NSL)
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Hong Kong seen from Victoria Peak. Photo: Sun Yeung

Hong Kong’s financial future tied to Greater Bay Area growth, rising mainland China incomes, panel says

  • The passage of the national security law prompted some wealthy clients to move assets out of Hong Kong, asset manager says
  • Many firms and investors are betting on more mainland wealth flowing to the city in the future, panellists say

The potential for future growth in the Greater Bay Area (GBA) and rising incomes in mainland China will help Hong Kong maintain its role as an attractive destination for international investors and capital despite the adoption of a controversial national security law for the city, according to a panel of financial and academic experts.

International and local Hong Kong firms want to tap that growing pot of wealth in China, which is expected to get “bigger” as the GBA develops and other programmes further open up the mainland market, according to Alvin Ma, managing director of Axiom Investment Management.

“Hong Kong has been the financial hub for so many years,” Ma said Thursday. “Why should it be changed?”

Ma was a speaker in the latest instalment of a series of webinars on the national security law organised by the Post – “SCMP Conversations: Can Hong Kong maintain its role as a financial hub?”.


Over a third of American businesses are thinking about leaving Hong Kong, AmCham survey finds

Over a third of American businesses are thinking about leaving Hong Kong, AmCham survey finds

Beijing adopted the national security law for Hong Kong in June, following months of street protests in the city.

A number of Hong Kong’s biggest employers, including HSBC, Standard Chartered and Swire Pacific, publicly came out in support of the law in hopes it would bring stability to an economy walloped by the protests and the effects of the coronavirus pandemic.

But, critics said the law could endanger freedoms in the city and threaten its future as an international financial centre.

The US sanctioned 11 Hong Kong and mainland officials in August over the law and some countries, including Japan, have undertaken efforts to try to recruit financial professionals away from the city following its passage.

Jessica Cutrera, a co-founder of asset manager The Capital Company, said more clients are expressing concerns about where their assets are booked than before, with some families moving assets to accounts with banks or wealth managers who are based or have branches in Singapore, Switzerland and the United States.

“It’s a shift we really hadn’t seen prior to the implementation of the national security law,” she said, but moving money out of Hong Kong remains a small part of their business.

Hong Kong national security law official English version:

Face-to-face relations, however, remain important for high-net-worth individuals and that has played in Hong Kong’s favour in attracting rising wealth from China, said Axiom’s Ma, who counts mainland Chinese as about three-quarters of his client base.

“The day-to-day contacts with the clients, with the language, even with the dialects is key, especially in Hong Kong,” he said.

Ma said there have been few concerns or queries from his clients about shifting their assets from Hong Kong since the law’s passage.

The combination of listing reforms and the passage of the security law also has sped the pace of a “homecoming” of Chinese firms pursuing secondary listings in Hong Kong, which has increased capital flows into the city, according to Robert Lee, chief executive of financial services firm Grand Capital Holdings and vice-chairman of the Hong Kong Securities Association.

“Overall, the investor sentiment has been pretty positive,” Lee said. “In the short- to medium-term, I think it is sustainable.”

Since November, US-listed Chinese firms Alibaba Group Holding,, NetEase and Yum China have raised more than US$22 billion combined through secondary listings on the Hong Kong stock exchange. Alibaba is the parent company of the Post.
Jessica Cutrera, co-founder of asset manager The Capital Company, said the conflict between US sanctions and the national security law is creating stress for companies trying to conduct business as they normally would. Photo: Xiaomei Chen
Ant Group, an Alibaba affiliate and the operator of Alipay, applied in August for a dual initial public offering in Hong Kong and Shanghai, in what could be the largest fundraising on record.

At the same time, financial firms are trying to delicately manoeuvre conflicts between US regulations and the national security law, which prohibits the implementation of sanctions against Hong Kong and the mainland.

“The confusion and the sanctions are creating a lot of stress and dislocation at the corporate level as firms are trying to figure out how to keep everyone happy and follow all of the rules in a way that allows them to continue to conduct their business the way they have,” Cutrera said.

On Thursday, SBI Holdings, Japan’s largest online broker, said it was considering downsizing its operations in Hong Kong, saying the city’s status as an international financial hub is likely to decline in the future. SBI generates more than 75 per cent of its revenue in Japan.

Unless things take a drastic turn, there is not much motivation for many companies to move their operations from the city, Lee said.

“For the business community or the financial services sector, it does take a lot of effort and a lot of time and resources to put together the people, the counterparties, the networks and the clients,” Lee said. “It’s not very easy for people to pick up and leave and start somewhere else.”