Spotlight falls on Hong Kong's strengths and weaknesses
While mainland ties have served city well, rivals are keen to move in, Asian Financial Forum told
Day two of the Asian Financial Forum focused on Hong Kong's strengths and weaknesses as a financial services provider. This largely dwelled on how the city benefits from its relationship with the mainland, and the risks of losing its edge to competitors such as Shanghai.
The chairman of the Hong Kong unit of China Investment Corp, China's US$575 billion sovereign wealth fund, encouraged Hong Kong to diversify away from the mainland. Lawrence Lau Juen-yee, chairman of CIC International (Hong Kong), said the city's exchange should list more regional stocks and beef up issuance of offshore yuan bonds from Southeast Asian firms.
"I've always advocated that Hong Kong list regional stocks, so people sitting in Hong Kong can easily buy the constituent stocks in the MSCI index," Lau said.
He said the city should bring in more issuers from Southeast Asia to raise capital in yuan, given that many of these countries had a trade surplus with China, and thus had excess yuan. "Hong Kong and Shanghai should play different roles, with Hong Kong functioning as a capital-raising hub for the region," Lau said.
Xiao Geng, vice-president of research at think tank the Fung Global Institute, said Hong Kong should do more to position itself as a gatekeeper for capital flows between China and the 10-member Association of Southeast Asian Nations. "Hong Kong can do a lot by basically integrating Asean into China," Xiao said.
Hong Kong can do a lot by basically integrating Asean into China
Two-way trade between China and Asean in 2011 was US$280 billion and is expected to reach US$1 trillion by 2020, according to Ngurah Swajaya, the Indonesian ambassador to Asean. Chinese firms were being lured by Asean's low-cost labour and growing middle class, he said.