Image: Reuters Berita 24 English - In 1997, Britain gave Hong Kong back to China . Many people were worried about the city's future and ...
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| Image: Reuters |
Berita 24 English - In 1997, Britain gave Hong Kong back to China. Many people were worried about the city's future and the role it would play in the world's financial system.
So far, Hong Kong has kept its status as a financial hub for the past 25 years, and some of the city's top executives are betting on a bright future because the territory is still a key way to invest in mainland China.
Charles Li, the former CEO of Hong Kong Exchanges and Clearing (HKEX) and the founder of microfinance platform Micro Connect, said that he is optimistic even though he thinks the next 25 years will be "very different."
"I'm sure that Hong Kong's overall prosperity will stay as strong as it was before," Li told Reuters, referring to China and the West.
Li said that when he and his friends celebrated the handover more than 20 years ago in the busy nightlife district of Lan Kwai Fong, many people saw it as the "beginning of a very long ride, and the best is yet to come."
On Friday, Hong Kong will be halfway through a 50-year experiment meant to give the city a lot of freedom while still being ruled by China.
Critics of the government say that political and civil rights have been severely limited, especially since a national security law went into effect in 2020.
Since the changeover, the financial sector has done well. As of the end of June, the value of Hong Kong's stock market was HK$27.65 trillion, which is about $3.52 trillion. This is up from HK$3.2 trillion in 1997, and investors from around the world are becoming more and more dependent on Hong Kong to trade mainland stocks.
According to data from HKEX, turnover on the Hong Kong-Shanghai stock connect pipeline, which gives access to tightly controlled capital on the mainland, jumped to 46.5 billion yuan on June 22, up from 12.8 billion yuan when it started in 2014.
On the Hong Kong-Shenzhen stock connect channel, turnover is about 58 billion yuan, up from 2.7 billion yuan when it started in 2016.
'INDISPENSABLE'
Even though there is a lot of uncertainty about what will happen to political and civil liberties as a result of electoral changes and the new national security law, other business leaders say Hong Kong will still be a financial hub.
Some business lobby groups and diplomats are worried about Hong Kong's future because talented people are leaving and they are worried about the rule of law and the independence of the courts.
Fred Hu, founder and chairman of private equity group Primavera, told Reuters, "Hong Kong will remain essential and the most competitive gateway between China and the rest of the world." "I don't think any city on the mainland, even some that I love, will skip Hong Kong."
In recent years, the city has competed for some of the world's most popular IPOs. For example, Alibaba, a huge e-commerce company based in New York, went to Hong Kong in November 2019 to raise $13 billion in a secondary listing.
Since the handover, Hong Kong has been the world's top stock exchange seven times based on the value of IPOs. The most recent time was in 2019, when 146 companies raised a total of $40 billion on the main board.
President Xi Jinping will be in Hong Kong on Friday for the swearing-in of the city's new leader, John Lee, and for celebrations to mark the handover. This is a move that officials say shows how important Hong Kong is to China.
"I think the central government has good intentions for Hong Kong. Hong Kong is important to them "Hu said.
Lee is a former security chief who is on the U.S. list of people who should be punished. The financial industry is eager to get back on track after two years of crippling COVID-19 restrictions that have caused people to leave and the border with mainland China to be mostly closed.
The head of investment banking for Asia-Pacific at UBS, David Chin, is optimistic about Hong Kong's future, but he says China's role on the world stage is very important.
"Hong Kong is also China's door to the rest of the world," he said. "So China's relationship with the rest of the world and how it interacts with other countries is also very important for Hong Kong."
($1 = 7.8490 Hong Kong dollars)
