(Essential questions) Xia Chun: Why are you optimistic about the future of Hong Kong's economy?
China News Service, Hong Kong, September 10th. Title: Xia Chun: Why are you optimistic about the future of Hong Kong's economy?
China News Agency reporter Liu Chenyao and Wang Jiacheng
In recent years, the United States and other external forces have repeatedly criticized Hong Kong's economy and encouraged the withdrawal of foreign businessmen in Hong Kong; there are even more institutions in the airport and US capital markets.
Analyze the prospects of Hong Kong’s economic development and propose a good way to stabilize Hong Kong’s status as an international financial center. Managing development expectations and stabilizing investment confidence has become a top priority.
Xia Chun, an adjunct professor at the School of Economics and Finance of the University of Hong Kong, an adviser to the Financial Committee of the Hong Kong Federation of Trade Unions, and chief economist of Noah Holdings, recently accepted an exclusive interview with China News Agency "East and West Questions" to analyze Hong Kong’s economic situation in depth and said that domestic and foreign investors are big Can continue to maintain confidence in the continued prosperity of Hong Kong.
Data map: On the evening of July 15th, you can enjoy the sunset view of Victoria Harbour from the top of Braemar Hill in Hong Kong.
Photo by Li Zhihua
China News Agency reporter: What do you think Hong Kong has in its economic development?
Xia Chun:
Many people think that the primary reason for Hong Kong's success is the implementation of the common law system like the United Kingdom and the United States, but this is not the case.
Countries that implement the common law system may not be able to develop well in economics and finance; they can also develop well if they do not adopt the common law system.
The "legal theory" of financial development is very popular, but later researchers pointed out that this theory ignores historical factors.
Hong Kong has a first-mover advantage in geographical environment.
When the British occupied it, it was mainly based on the fact that Hong Kong was a good harbor without freezing in winter, which is rare in the world.
Hong Kong was very desolate at that time, but its geographic advantages such as the depth and breadth of the port were rare in the world.
It may be difficult for people to think that the financial centers of Egypt and Cuba were both under civil law at that time.
Earlier financial centers, such as Amsterdam, Venice, and Tokyo, the Asia-Pacific financial center before Hong Kong, also implemented a civil law system.
The most important geographical advantage of Hong Kong is its backing to Mainland China.
In the process of China's rise, Hong Kong is like a gate, with both sides passing through, acting like a "gas station" or a "two-way toll station".
In addition, Hong Kong is just at the time difference between the two major international financial centers of New York and London. The global financial market operates 24 hours a day, and Hong Kong can make up for the time difference of other financial centers. This is an inherent advantage.
Data map: K11 MUSEA shopping mall in Tsim Sha Tsui, Hong Kong during the epidemic.
Photo by China News Agency reporter Zhang Wei
China News Service: What caused some people to lose confidence in Hong Kong?
Xia Chun:
In June this year, the Lausanne School of Management in Switzerland released the "2021 World Competitiveness Report", and Hong Kong ranked seventh.
Those who are not optimistic about Hong Kong will say that in 2019, it will be second in the world, fifth in the world in 2020, and seventh in the world by 2021. It seems that its competitiveness has been declining.
But those who are optimistic about Hong Kong will notice that among the four competitiveness factors, Hong Kong ranks first and second in government efficiency and commercial efficiency, and they are both stable.
The main drag on the rankings is economic performance, including the impact of the 2019 revision of the law and the impact of the new crown pneumonia epidemic.
In addition, Hong Kong ranked first in the recently announced Global Economic Recovery Index.
Many people like to talk about the concept of "two Hong Kong" and "three-economy".
"Triple economy" refers to traditional industries (construction, tourism, retail, etc.), finance and real estate; "Two Hong Kong" separates those who benefit from the economic development of Hong Kong and those who have not enjoyed the development dividend. These two groups of people Views on the future of Hong Kong are also different.
Those who are relatively benefited may see the good side more; the other group of people may also know the good side of Hong Kong, but they cannot enjoy it, so they are relatively pessimistic about the future.
In fact, there is considerable development energy hidden in the structure of Hong Kong's "tri-economy", and there is also ample room for adjustment, transformation, and development.
Data map: On the morning of July 19, many groups of Hong Kong citizens went outside the US Consulate in Hong Kong and strongly condemned the US for unreasonable sanctions, discredited Hong Kong's business environment, grossly intervened in Hong Kong affairs, and interfered in China's internal affairs.
Photo by China News Agency reporter Li Zhihua
China News Service: In recent years, the United States has repeatedly intervened in Hong Kong affairs, especially encouraging some foreign businessmen to leave Hong Kong. Will this affect the development of Hong Kong?
Xia Chun:
Many people believe that the U.S.'s announcement of a policy aimed at a certain place will have a great impact, but it depends on the data.
Hong Kong was affected by the epidemic last year, and trade did indeed decline.
However, as an international financial center, Hong Kong won the global IPO market fundraising champion even in 2019.
In 2020, Hong Kong's fundraising scale in the global IPO market is second only to Nasdaq.
In addition, Hong Kong will have a net inflow of funds from 2019 to 2020; the exchange rate of the Hong Kong dollar has been in a strong position in 2020, and due to the continuous inflow of funds, the strong-side exchange guarantee has been triggered 85 times from April 2019 to 2020. Hong Kong The HKMA bought 50 billion US dollars from the market, which is the highest amount since 2010.
Hong Kong's total bank deposits increased in both 2019 and 2020. In 2019, it recorded 2.9%. After increasing year-on-year, it will increase by 5.4% in 2020.
According to data from the Hong Kong Securities Regulatory Commission, Hong Kong has nearly 35 trillion Hong Kong dollars in assets under management.
As of December 31, 2020, the total asset value of Hong Kong's private banking and private wealth management business increased by 25% from 2019 to HK$11.3 trillion, and the net asset inflow was HK$656 billion, accounting for the year-on-year growth of private banking and private wealth management business Of 29%.
These figures are beyond the imagination of those who are short on the development of Hong Kong's financial center.
In the long run, Hong Kong is closely related to regional financial activities, not only the mainland of China, but also ASEAN and even Asia as a whole.
At present, Asia’s GDP accounts for more than 30% of the world’s GDP, and it is in the same position as the United States and Europe. It is basically certain that it will increase to 40% or even 50% in the future.
The scale of the economy is closely related to financial development.
As Asia's international financial center, Hong Kong will also rise.
Data map: Hong Kong Victoria Harbour and Wan Chai Convention and Exhibition Center.
Photo by Liu Yang Picture source: CTPphoto
China News Service: Will there be an extreme situation, that is, financial institutions and enterprises in Europe and the United States really withdraw from Hong Kong?
Xia Chun: There
are indeed a small number of foreign businessmen withdrawing from Hong Kong, but the media tend to focus on those who have left and rarely report on the new arrivals.
Some foreign businessmen who left actually went to Shenzhen and Shanghai, because the market there is bigger.
Tara Joseph, the president of the Hong Kong Chamber of Commerce in the United States, also recently publicly stated that the Hong Kong National Security Law has not had a negative impact on US-funded companies.
The Financial Secretary of the Hong Kong Special Administrative Region Government recently released data showing that 78 of the world's top 100 banks are operating in Hong Kong; 13 of the world's top 20 insurance companies are operating in Hong Kong.
Beginning in May last year, the market often circulated news about Hong Kong people deploying funds to Singapore.
However, according to the latest data, Singapore's non-resident deposits only rose by about HK$14.8 billion from the end of May last year to the end of May this year, an increase of 4.1%.
According to public data from the Hong Kong Monetary Authority, the number of deposits in Hong Kong increased by 1 trillion Hong Kong dollars during the period, an increase of 7.2%; the Hong Kong dollar deposits, which are representative of the region alone, increased by 8.8% during the period to approximately 610 billion Hong Kong dollars.
Therefore, some companies will leave, but the extreme situation of all evacuations will not happen, and some of them may also return.
Data map: At noon on June 30th, installation workers were hanging up the banner of "He Jiandang Centennial Celebration of Hong Kong's Return" at the entrance of the National Security Office of the Central People's Government in the Hong Kong Special Administrative Region.
That day was also the first anniversary of the promulgation and implementation of the "Hong Kong National Security Law."
Photo by China News Agency reporter Zhang Wei
Reporter from China News Service: It has been more than a year since the implementation of the Hong Kong National Security Law. Has Hong Kong's status as an international financial center changed as a result?
Xia Chun:
Hong Kong's national security law has almost no impact on the financial industry, because finance needs a stable environment.
Some of the organizations that publicly declared that they would leave Hong Kong are not operating smoothly in Hong Kong, some are because their investment strategies are not adapted to the Hong Kong corporate environment, and some are due to disagreements within the company's management, but they are exaggerated by the media.
Statistics show that Hong Kong's status as an international financial center has become more stable after the Hong Kong National Security Law.
On the one hand, because Hong Kong is more stable, it is conducive to capital demanders and capital suppliers to focus on investment itself, and have clearer and more optimistic expectations about the future.
On the other hand, because the current interest rate conditions in Hong Kong are better than those in the international market, China's economic growth and investment opportunities are also better than other major economies.
Although the market has recently been affected by anti-monopoly and strict supervision, similar policy risks have also appeared in 2015 and 2018. For most of the past five or six years, foreign investors have been actively buying Chinese stocks and bonds.
In the past, there were many voices who looked down on Hong Kong and the Chinese mainland, saying that the Chinese economy is a huge "bubble" or "pressure cooker" that will explode at any time.
These voices are now proven to be wrong.
Of course, Hong Kong has a lot of room for power.
The advantages of Hong Kong are, first, its IPO fund-raising ability, and second, the large scale of Hong Kong's stock and bond market, securities business, asset management business, and insurance business.
In addition, Hong Kong's finance has many new opportunities for development, such as green bonds, renminbi financing and trading, "Belt and Road" investment and financing platforms, limited partnership funds, wealth management business, etc. The Hong Kong Special Administrative Region government has recently introduced successive policies to promote it.
All these have brought room for Hong Kong's financial prosperity.
In addition, in the next three to five years, some important infrastructure projects in Hong Kong, such as the Kai Tak Development Zone, the West Kowloon Cultural District, and the subways, highways, bridges, and tunnels connecting the New Territories, Kowloon and Hong Kong Island, will be completed one after another.
Improved infrastructure will make the work and life of Hong Kong people more convenient, further magnify their advantages, and continue to attract the inflow of high-end talents, which in turn will provide strong support for Hong Kong's future economic and social development.
In the future, as long as we have the courage to reform, grasp the direction of progress, accelerate integration into the overall national development, and establish new concepts such as development first, people's livelihood, effective market, and effective government, Hong Kong's annual GDP growth rate in the next 20 years is still expected to reach 3% to 3%. 4%.
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Expert profile:
Xia Chun, Ph.D. in Economics, University of Minnesota, Adjunct Professor, School of Economics and Finance, University of Hong Kong, Consultant of the Financial Committee of the Hong Kong Federation of Trade Unions, mainly researches macroeconomics, asset management, investment strategies, hedge funds, etc., is currently listed on the New York Stock Exchange in the United States , China's largest third-party wealth management institution-Chief Economist of Noah Holdings.
Living, teaching and doing economic research in Hong Kong for more than 13 years. The current employment organization is listed in the United States and has a large branch in China. Therefore, he is well versed in the economic development of the United States, Mainland China and Hong Kong. The article "Prospects" became a hit on the Internet, and caused great repercussions in the domestic and foreign capital circles.