Hong Kong must maximize its advantages to stay relevant
Updated: 2014-11-27 06:32
By Sophie He in Hong Kong(HK Edition)
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Hong Kong's economic future is bright because the city has its major advantages in finance and logistics to maintain its competitive position. Provided to China Daily |
Business leaders identify the city's strength in finance and logistics but warn about pollution and high property prices at forum
Despite the rising competitions from Shanghai and Shenzhen, Hong Kong business leaders have remained confident that the city has its unique advantages that will ensure its role in Chinese economic development.
For instance, Hong Kong has become a premier offshore yuan center that plays a central role in the internationalization of the Chinese currency, Vincent Lo, the founder and chairman of the Shui On Group, told a forum in Hong Kong on Wednesday.
"The Shanghai-Hong Kong Stock Connect is a big step forward toward that direction, despite that the trading volume so far didn't meet up with certain expectations," said Lo.
Many people have expressed their worries that Shanghai's bid to become an international financial center can eventually eclipse Hong Kong. But Lo predicted that Hong Kong's position as a wealth management center for the large amount of wealth created on the mainland will stand unchallenged.
"A lot of my friends who live on the mainland have accumulated a large amount of wealth in a very short period of time and they don't really know how to deal with it. That's why they are travelling all around the world and buying expensive things," Lo said.
Soon these wealthy mainland tycoons will have to seek the expertise of Hong Kong's financial institutions in setting up family trusts and other financial vehicles to handle their wealth, Lo said.
Hong Kong can also provide the financial services needed by many mainland entrepreneurs in diversifying their wealth overseas, Lo said.
"I myself, for example, had troubles in investing in the US because I picked a wrong partner," Lo added. But many mainland investors, he said, are still relying on the advice of friends and relatives in making foreign investment decisions. Sooner or later, they will find that this way of doing things isn't going to work, he said. By then, Chinese investors would realize the advantage of seeking advice from the many experts in Hong Kong's financial institutions, Lo said.
Benjamin Hung, chief executive of Standard Chartered Greater China region, estimated that by 2020, the Chinese mainland, together with the various fast growing economies in Southeast Asia, will provide a huge potential consumption market for the world, and Hong Kong will certainly benefit from it.
Tung Chee-chen, chairman of Orient Overseas (International) Ltd, said that he expects Hong Kong will continue to be an important logistic services center of the Chinese mainland in the coming decade.
During the past 30 to 40 years, Hong Kong has invested in logistic infrastructures to take advantages of the tremendous opportunity of the mainland's foreign trade boom. "We have worked hard to make logistics and trade two pillar industries that support the Hong Kong economy," he said.
Tung noted that mainland is undergoing a major economic restructuring process by upgrading its manufacturing capacity for more value-added products. The Chinese government has also introduced numerous policies to boost domestic consumption.
Rising consumption on the mainland would mean large increases in imports, which present a huge opportunity for Hong Kong, Tung said.
Hong Kong needs to continue to invest in the logistic industry, building the right hardware, upgrading the infrastructure and implementing proper software to improve efficiency and transparency, said Tung.
In terms of challenges that Hong Kong has to face, Hung said that the city needs to deal with issues including worsening pollution and the widening wealth gap between the rich minority and the poor majority.
Lo warned that the Hong Kong government needs to address the problem of high housing prices that have deterred many young talents from settling in Hong Kong
"We need to give young people hope and give them a reason to stay in the city," said Lo.
(HK Edition 11/27/2014 page8)