What can Hong Kong offer in tackling the mainland’s financial mess?
The time seems ripe for Beijing to draw on the city’s experience in weathering economic storms
Beijing may be finally learning from Hong Kong’s regulatory experience as it makes unprecedented efforts to maintain domestic financial stability and contain external shocks.
This can be seen from last week’s half-year economic analysis seminar where Andrew Sheng, former deputy chief executive of the Hong Kong Monetary Authority and chairman of the Hong Kong Securities and Futures Commission, was invited by Premier Li Keqiang to share his thoughts.
The rare presence of Hong Kong experts at such a high-profile occasion fuels speculation that mainland authorities are ready to draw from the financial hub’s regulatory experience to address some of the country’s most urgent problems, including shadow banking, excessive leverage, financial irregularities and capital outflows.
“Hong Kong’s regulatory regime may be not the most perfect, but it is mature and strict enough,” said Gary Liu, president of the Shanghai-based think tank China Financial Reform Institute. “There is no doubt that the mainland should learn from Hong Kong on its road to financial liberalisation.”
Hong Kong experts have been called upon since the city was handed over to China 20 years ago, but their influence in policymaking has largely declined since Laura Cha Shih May-lung stepped down as vice-chair of the China Securities Regulatory Commission in 2004.
“There were only a few officials from Hong Kong, and their power was very limited,” Liu said. But Beijing now appeared willing to tap Hong Kong’s experience as its financial problems deepen.
