Hong Kong’s financial summit spells good fortune for the city

The attendance of top bankers reflects the opportunities on the horizon for Hong Kong and the long-term prospects for economic growth on the mainland
In a year of bank failures in the US, the topic of mitigating future financial risk was also high on the agenda for influential business leaders

Bernard Chan

Published: 4:30pm, 16 Nov 2023

Why you can trust SCMP

The magnificent Hong Kong Palace Museum, home to over 900 priceless treasures, was a fitting venue for the welcome dinner of this year’s Global Financial Leaders’ Investment Summit.

Bringing together around 300 of the most influential business leaders from 160 global financial institutions, many of whom are clients of the Hong Kong Monetary Authority, is a massive task, particularly in today’s complex geopolitical climate – not to mention at a time when much of the international media coverage unfairly detracts from Hong Kong’s position as a leading international centre for finance and trade, with naysayers questioning our future and the resilience of our unique “one country, two systems” framework.

Indeed, China’s economic trajectory was inevitably a focal point at the summit organised by the HKMA. Chinese regulators were strongly represented and on hand to discuss central government policy on overcoming hurdles, particularly in the property sector, while dealing with youth unemployment and consumer confidence, among other things, none of which are unique to China.

Most striking to me, however, was how the highly influential grouping included 90 group chairpersons or CEOs from global financial titans. Their attendance reflects the economic opportunities on the horizon for Hong Kong, as well as the benefits of working more closely together to overcome the economic and geopolitical challenges ahead.

Among those represented at the summit were Morgan Stanley, UBS Group, Deutsche Bank, Goldman Sachs, Barclays, Blackstone, Carlyle, Standard Chartered, BNP Paribas, Bank of China, HSBC, Sequoia China, Fidelity International, Invesco, BlackRock, J.P. Morgan Chase Bank, Marshall Wace and Citadel Securities. The United Nations special envoy on climate action and finance was also present.

The event offered an unusual opportunity for face-to-face discussions and sharing among business leaders.

Such dialogue is critical to enhancing understanding and will help the international financial community adapt to the complex landscape while recognising the role Hong Kong will continue to play.

Chinese Vice-Premier He Lifeng speaks during the Global Financial Leaders’ Investment Summit in Hong Kong on November 7 via a pre-recorded video. Photo: Reuters

In a year that saw financial markets reeling from the failure of three of America’s most crypto-friendly lenders, Silvergate, Silicon Valley Bank and Signature Bank, and regulators seizing the assets of First Republic Bank in a deal to resolve the most significant US bank failure since the 2008 financial crisis, the contagion quickly spread to Europe.

The failure of Credit Suisse, a global systemically important bank, resulted in an investor exodus, putting pressure on other euro-zone banks, including Deutsche Bank. Almost immediately, governments and central banks intervened, providing troubled financial institutions with rescue packages to prevent further panic.

So the topic of mitigating future financial risk was high on the agenda, and the summit benefited from the attendance of some of the people who were instrumental in restoring confidence in the banking sector.

Hong Kong poised to manage ‘lion’s share’ of Asia’s wealth: JPMorgan head

All participants remain concerned about the continuing global economic slowdown, high-interest-rate environment, uncertain trajectory of inflation, sustained geopolitical tensions and the potential for conflict to spread.

Other concerns include the regulation of disruptive technologies like AI; of course, climate change and sustainable development are on all agendas.

The announcement of WeWork’s bankruptcy filing last week, just four years after its peak valuation of US$47 billion, was a reminder of the economic headwinds. This may not have shocked financial observers though; many have long questioned such high valuations of a business that had never reported a profit.

03:14

FTX crypto exchange founder Sam Bankman-Fried convicted by US court on fraud charges

Undoubtedly, the office-sharing company’s business model was affected by the pandemic. However, its collapse is a reminder that the era of cheap money, which fuelled unicorns like FTX and Theranos, was simply unsustainable.

With challenges come opportunities, and fintech is driving innovation and transforming all aspects of the financial services landscape. Advances have brought efficiencies that benefit consumers and the corporate sector and address a central issue of financial inclusion: for example, around half of some 600 million people in Southeast Asia are unbanked and underbanked. Hong Kong is at the forefront in critical areas of development and regulation.

The summit concluded positively, which is vital for Hong Kong and our role as a leading centre for finance and trade. The general view was that long-term opportunities exist in the Chinese economy, including technology and sustainability.

Meanwhile, the annual Asia-Pacific Economic Cooperation summit is nearing an end in San Francisco, but the meeting between Chinese President Xi Jinping and US President Joe Biden was another critical step forward.

I remain confident that the positive experiences of Hong Kong’s influential guests will be relayed to all stakeholders so we can make progress and engage in more profound dialogue to solve common issues for the benefit of everyone.

Bernard Chan is a Hong Kong businessman and former Executive Council convenor