On May 30, PCCW (0008. HK) held its annual general meeting. At the meeting, shareholders were most concerned about Hong Kong's economic and business prospects. Li Zekai, chairman and executive director of the group and the youngest son of Li Ka-shing, said that Hong Kong's economy is indeed facing some challenges today, but looking at the ups and downs of the past few decades, Hong Kong "can get back on its feet every time it falls", and he reiterated that he has "great confidence in Hong Kong".
Coincidentally, Cheung Kong Infrastructure (1038. Li Zeju, chairman of the board of directors and brother of Li Zekai, also bluntly said at the shareholders' meeting not long ago, "Hong Kong is my home town, and I have special feelings for it", and "the more international enterprises and international family offices, the stronger Hong Kong's status as an international financial center will be."
In February this year, when the former chairman of the Asia Pacific region of Da Mo wrote an article "it pains me to say HK is over", it attracted a lot of controversy and repercussions, and like most Hong Kong people, I did not agree with his view, let alone the pessimistic conclusion that "Hong Kong is over".
As the Li brothers said, Hong Kong's status as an international financial centre is unshakable and will only grow stronger with development.
The status of an international financial center is obvious to all
It is true that compared with the old international financial centers such as New York and London, Hong Kong's formation and development of the international financial center is very short, and the timetable for Hong Kong to become an international financial center can be clearly established can be traced back to the 70s and 80s of the last century.
In the 1970s, the number of international banking institutions and other financial intermediaries in Hong Kong increased significantly. In 1979, about 64 of the world's top 100 commercial banks operated in Hong Kong in some form. At that time, Hong Kong was already the region with the largest number of foreign banks and financial institutions after London and New York. On 2 April 1986, the Stock Exchange of Hong Kong Limited (the "Stock Exchange") officially opened for business, becoming the only legal exchange in Hong Kong. On September 22 of the same year, the Stock Exchange was admitted as a full member of the International Federation of Stock Exchanges, thus establishing extensive cooperation with the world's stock exchanges.
After that, the "top three" of global financial centers were announced: New York, London and Hong Kong.
It was not until March 2007 that the "Global Financial Centres Index" (GFCI) was launched, which was published by the British think tank Z/Yen, and was widely used in the ranking of global financial centers, and was considered the most authoritative reference for financial centers, only 14 years ago, in this ranking, Hong Kong ranked fourth in 2023, with a score of 741 points, and the gap with Singapore, which ranked third, was only 1 point.
However, Hong Kong's positioning as an international financial centre has been approaching 40 years.
What's more, some people recently compared the Taiwan weighted index with Hong Kong's Hang Seng Index, and when Hong Kong stocks were weak at the end of last year and were surpassed by Taiwan's index in points, some foreign media who were "moved by bad ideas" speculated that Taiwan's stock market index surpassed Hong Kong, which is known as an international financial center. However, experts in Taiwan and Hong Kong have pointed out that the calculation basis of the stock market indices in the two places is different, and it is not a good comparison.
Others often compare Singapore with Hong Kong, saying that "Hong Kong is being overtaken by Singapore in all aspects". Last month, Financial Secretary Paul Chan Mo-po responded directly at a business luncheon in San Francisco: "The two cannot be compared. Taking the stock market as an example, he said that the market capitalization of the Hong Kong stock market is 36 trillion Hong Kong dollars, the average daily turnover exceeds 100 billion Hong Kong dollars, and there are more than 2,600 listed companies. As for the Singapore stock market, the market capitalization is less than HK$6 trillion, and the average daily turnover is less than HK$10 billion.
Who would compare apples and oranges, and ask everyone which is better?
For another example, anyone who has traveled to Singapore knows that the local standard of living in Singapore is very high, in addition to the high prices, there is also GST consumption tax, since January 1 this year, the current tax rate is 9%, income tax, profits tax are higher than Hong Kong. There have been many reports before that many large investment banks are preparing to move their Hong Kong headquarters to Singapore, because the salary cost is generally reduced by 40% compared with Hong Kong, and the income of Singaporean investment bankers is less than that of Hong Kong, but they are facing the same cost of living as Hong Kong, how can they live happily?
Maintain the seven advantages, Hong Kong will not "play out"
The Li brothers' confidence in Hong Kong is by no means unique.
After stepping down as Secretary for Commerce and Economic Development in 2008, Mr Frederick Ma is now the Chairman of FWD Group and has always been concerned about Hong Kong's financial development. In March this year, Mr Ma told the media that Hong Kong has seven advantages, namely a stable financial market, its status as an international financial centre, an independent judicial system, free movement of capital and people, a free Internet, a quality local education system, and attracting global talent.
"If we maintain these seven advantages, Hong Kong will not be 'finished'." He said.
As a world-class capital market and financial center, Asia's largest offshore wealth management center, a world-leading IPO market, and a flexible and inclusive local listing regime, the "Hong Kong International Financial Center Heritage Theory" has been an empty joke from the beginning.
In recent months, the Hong Kong stock market has picked up, coupled with the five capital market cooperation measures issued by the China Securities Regulatory Commission, which clearly support the listing of leading enterprises in the mainland industry in Hong Kong.
In May, Hong Kong Stock Exchange CEO Chen Yiting revealed that there are about 20 new listings in Hong Kong since the beginning of the year, which are relatively small. The Hong Kong Stock Exchange has about 100 valid applications on hand, and it is expected that the "good deal" will be conducive to the completion of the listing in the context of lower interest rates and improved investment sentiment. In addition, for emerging high-tech companies such as artificial intelligence, cloud computing and quantum computing, the Hong Kong Stock Exchange has formulated listing rules to facilitate the fundraising of these enterprises.
According to the website of the Hong Kong Stock Exchange, among the more than 100 companies that issued prospectuses on the Hong Kong Stock Exchange, mainland companies are the main force, such as Cao Cao Travel, Mixue Bingcheng, Horizon, Zhuozheng Medical, Mao Geping, Shanghai Auntie, and Tick Travel. There are also unicorn companies such as Horizon, Yunzhisheng, and Insilico Medicine, and even large companies including Midea Group.
On the 28th of the same month, He Yaodong, co-CEO of JPMorgan Chase China, also said that the Hong Kong stock market has recently attracted hedge funds to buy. He said that the Hang Seng Index has experienced a rebound and the market has not seen large-scale profit-taking, indicating that investors' funds tend to stay in the market.
What will happen to Hong Kong in the future?
Next week, the former chairman will return to Hong Kong and plan to give speeches in many places. If we take a closer look at his articles, we can learn the direction of Hong Kong's improvement from his thinking, and "if there is one, it will be changed, and if there is none, it will be encouraged."
The Hong Kong government's administrative capacity, the Sino-US game, and the direction of economic improvement that he put forward are all worthy of in-depth study and discussion, and we should do our best to find countermeasures. Legislative Council member Ho Chun-yiu pointed out at last week's Legislative Council meeting that "there are too many redundant people in Hong Kong" and that "the fat body not only cannot keep up with the development of society, but also drags down the progress of the whole city." ”
"The most important thing is to get rid of the useless." He Junyao said bitterly.
Mr Ma recently said publicly that Hong Kong's economy needs to move away from the erroneous linear thinking of the past, follow the example of Switzerland and turn to valuable and competitive industries, and move from relying on the European market to seek business opportunities in other regions, such as the Middle East.
This idea echoes that of the current Secretary for Commerce and Economic Development, Mr Yau Ying-wah, who said last week that Hong Kong needs to learn to find new opportunities to attract more foreign investment, such as the Middle East and ASEAN, in a changing world.
In addition to meeting new people, it is more important to do a good job of self-promotion and maintain existing relationships. Lam Wai-hung, Chairman of the Hong Kong Association of Banks, said that Hong Kong should strengthen external promotion, strengthen international ties and expand the resources of the Bay Area.
At the Legislative Council on June 3, Chan Mo-po said that Europe and the United States are very concerned about the situation in Hong Kong, and the other party (referring to Europe and the United States) has had a negative impression of the mainland and Hong Kong from the media in the past, but when he (referring to Chen Maobo) laid out the facts, Europe and the United States are very confident in the development of the Greater Bay Area.
Chan Mo-po said that SAR officials should go out more to do publicity. Mr Chan also invited people from Europe and the United States to participate in the event. He estimated that the funds coming to Hong Kong from Europe and the United States would continue, and as long as there was business to do and good returns, he believed that they would come to Hong Kong for development.
He said Hong Kong's economy is expected to grow further for the rest of the year. Based on the current situation, the HKSAR Government maintains the forecast for Hong Kong's annual economic growth to be between 2.5% and 3.5%.
"Hong Kong has a row of play." In February this year, Regina Ip, convener of the Executive Council and member of the Legislative Council, wrote in the British media "Financial Times" in a refutation of the "Hong Kong is over" remarks.
As Gong Yutian said in the movie "The Grandmaster": "If you don't forget, there will be an echo, a breath, light a lamp, and there will be people if there is a lamp." "Hong Kong will never be finished, and it will never be finished, and this brilliant pearl of the Orient standing proudly in southern China will shine forever.