Illustration: Craig Stephens
Stephen Wong
Stephen Wong

How Hong Kong has flourished since 1997 and proved its Western detractors wrong

  • Hong Kong has defied international doomsayers and gone from strength to strength as its economic development has become more aligned with mainland China’s
  • China’s economic growth has helped boost Hong Kong’s standing as a financial hub, drawing in business and talent from around the world

A quarter of a century ago, as Hong Kong prepared for its return to the motherland, the international media and academic consensus at the time was that the “Death of Hong Kong” was upon us. The notable wave of emigration from the city in the mid-1990s understandably added fuel to this narrative.

Twenty-five years later, any objective and honest assessment should conclude that the narrative was not just inaccurate but way off the mark, notwithstanding the persistent doom- and fearmongering of the Western media.
Indeed, “Nylonkong” has now become a common phrase in the business community, with Hong Kong being consistently recognised as one of the top international financial centres of the world, along with New York and London.
The city maintained its third place on the leader board in the latest edition of the Global Financial Centres Index, published in March, having defended its top position in Asia against challenges from Shanghai and Singapore.
The Hong Kong stock exchange building in Central, seen on June 24. Photo: Dickson Lee

Statistics released by the Financial Services and Treasury Bureau also suggest that Hong Kong remains an attractive choice for overseas talent. The number of people coming to work in the city via the General Employment Policy and the Admission Scheme for Mainland Talents and Professionals rebounded last year, with an almost 20 per cent increase compared with 2020.

The city continues to be an ideal place for businesses from all over the globe to set up operations. The total number of registered non-local companies rose from about 13,700 in 2020 to 14,400 at the end of February this year.

In fact, the number of regional headquarters and offices in Hong Kong has been on a persistent upward trend over the past five years – with the exception of those from the US. This has been the case since 2018 when the Sino-US trade dispute first erupted.

However, countries like the UK and France have kept a stable or even growing business presence in the city. This is a testament to the World Bank’s ranking of Hong Kong as the third-most-business-friendly economy in the world in 2020, a rise from its fourth and fifth place respectively in the preceding two years.

Undoubtedly, all these accomplishments and recognitions would not have been possible without the close connection to and support from mainland China, the world’s second-largest economy. Indeed, Hong Kong and the mainland’s economic development have become even more aligned since the city’s return to China.

To wit, Hong Kong has ranked as the world’s top IPO venue in seven of the past 13 years, and mainland enterprises accounted for 98 per cent of all Hong Kong’s IPOs in terms of market value in 2021. Their share in our stock market transaction value has more than doubled since 1997, whereas the proportion of market capitalisation soared from 16 per cent to 78 per cent.

Without doubt, Hong Kong’s stock market turnover and market capitalisation would be drastically diminished were it not for the mainland enterprises listed. They have helped to consolidate the city’s status as an international financial centre among global investors, while also tapping into it to raise funds and expand business.

As a Hong Kong financial practitioner, the joy this success brings me is beyond description, as it perfectly illustrates how the financial sector has flourished under the grand concept and successful execution of “one country, two systems”.


A look back at Hong Kong 25 years since the handover

A look back at Hong Kong 25 years since the handover

As I review the remarkable developments of our city over the past 25 years, I cannot help but recollect memories of 1997, a year which carries profound significance personally.

It was the year I embarked on my career, having received a master’s degree from Yale University and a bachelor’s degree in economics from the University of Chicago. I left the ivory tower and started working in New York, alone in a foreign country. While pulling long hours day in, day out, in my quiet moments I held my hometown and family in mind.

My parents moved from rural Chaozhou in the 1960s and toiled to provide for their children. They witnessed Hong Kong’s transformation to an international metropolis. The fact that citizens, given a chance, could unleash their potential and bring vitality to society was a great inspiration to me growing up.

People take in the view along the waterfront in Tsim Sha Tsui on April 24. Photo: Xiaomei Chen

It was also the source of my determination to return home one day, and I was most happy that I did so in 2005 to continue my career in the financial industry.

Looking forward, the 14th five-year plan sets out the country’s support in strengthening and enhancing Hong Kong’s position as an international financial, aviation and trading centre. The plan also promotes Hong Kong’s development into an international innovation and technology hub, and an East-meets-West centre for international cultural exchange.

In the meantime, Hong Kong’s core traditional strengths will be crucial for helping our country go global as China takes on an increasingly significant international role. Hong Kong can capitalise on this growth by contributing its strengths to our motherland’s overall needs.

Where Hong Kong’s legal system stands 25 years after handover

The implementation of the national security law and an improved electoral system represent a major turning point for the city as we restore order from chaos.

The next five years represent a critical juncture for Hong Kong as we evolve from stability to prosperity. I am confident that, with our concerted efforts, we can rise to the numerous socio-economic challenges facing our city and genuinely improve life for all.

Dr Stephen Wong is a Legislative Council member and senior vice-president and executive director of the Public Policy Institute, Our Hong Kong Foundation