The National People’s Congress’ recent decision to improve Hong Kong’s electoral system has attracted criticism from the US Department of State, which went on to update the Hong Kong Autonomy Act to include 24 more mainland and HKSAR officials on its sanction list, raising the total number of sanctioned officials from 10 to 34. In his press statement, US Secretary of State Antony Blinken announced that foreign financial institutions that knowingly conduct significant transactions with those individuals would be subject to sanctions. Meanwhile on the other side of the globe, the China Development Institute (CDI) in Shenzhen and British think tank Z/Yen jointly published the latest edition of the “Global Financial Centres Index” report, in which Hong Kong’s ranking rose from 5th place in September last year to 4th place, with New York, London and Shanghai taking the top three places and Singapore at 5th.
Although it was a coincidence that the two events took place on the same day, some people could not but ask whether Washington’s tough stance towards China, including the HKSAR, would affect Hong Kong’s status as an international financial center. My answer to this question is no.
Z/Yen began publishing the Global Financial Centres Index every March and September in 2007. CDI formed a strategic partnership with Z/Yen in July 2016 to compile and publish the index. The latest index is based on scores calculated according to 10,774 online questionnaires submitted by individual respondents around the world on 65,507 assessment items. It is compiled using 143 instrumental indicators and widely seen as scientific and authoritative.
Furthermore, the latest index was, for the first time, sponsored by the Hong Kong Financial Services Development Council (FSDC). It is indicative of the fact that Hong Kong’s financial sector values the scientific approach and the authoritative nature of the index. What’s more, they are also aware in all seriousness that Shanghai has overtaken Hong Kong in the latest rankings of international financial centers.
Therefore, Hong Kong must maintain global vision without losing sight of its shortcomings. Those are the two basic methods we will use to analyze and assess Hong Kong’s international financial center status in the future.
Although the White House has changed hands, Washington remains committed to its all-out effort to contain China, albeit with a different approach. Unlike Donald Trump’s one-man show against China, Joe Biden is commanding allies like a pack of hungry wolves attacking China. In terms of areas of strike, the US has been focused on advanced technology export and financial markets. While the battle for hi-tech dominance has already been raging for some time, the financial front remains mainly overcast. But there is no doubt a heavy storm is coming very soon. The jacked-up financial sanctions on 34 mainland and HKSAR officials is definitely a big dark cloud; while another takes the shape of US regulators forcing Chinese companies out of American securities markets.Recently, US President Joe Biden held online summits with his Japanese, South Korean, Indian and Australian counterparts; while his Secretary of State and Secretary of Defense visited Japan and South Korea together. The US is now reinforcing a hostile circle of anti-China forces. Whether the wolf-pack tactic will work as well as Washington wants it to notwithstanding, it is only a matter of time before the US unleashes the financial bloodhound on China, including the HKSAR.
If the Chinese mainland and the HKSAR are only connected to the international financial markets, which remain dominated by the US, they will most likely experience a severe impact when the financial strike comes. Thankfully, China has kept its guard high all these years and taken precautionary steps, such as the Belt and Road Initiative as an alternative to US domination. Hong Kong needs to pick its pace of integrating its own development into the over all development strategy of the country and weather the coming storm with the motherland.
China has kept its guard high all these years and taken precautionary steps, such as the Belt and Road Initiative as an alternative to US domination. Hong Kong needs to pick its pace of integrating its own development into the over all development strategy of the country and weather the coming storm with the motherland
As of now, no one can deny America’s dominance in global financial markets. Nevertheless, history has repeatedly proved that hegemony never lasts. The West-to-East paradigm shift in global power that is happening in the first half of the 21st century cannot be stopped. The latest Global Financial Centres Index report quotes Laurence Li SC, Chairman of the FSDC, as saying that Hong Kong’s ranking from fifth to fourth has proved once again its strong bonds with the mainland and other cities in Asia are widely recognized and appreciated by the financial industry in Hong Kong.
We do not expect nor seek to establish two major financial systems in the world. However, we understand that even under US sanctions, China (including Hong Kong) can still develop close economic and financial ties with most countries in the world. That means China can provide two international financial centers (Hong Kong and Shanghai) for mankind in the 21st century.
Not long ago, the Heritage Foundation, which is a US government tool, dropped Hong Kong from its annual Index of Economic Freedom on the grounds that Hong Kong is politically indistinguishable from the Chinese mainland. However, the Global Financial Centres Index has maintained its objective view of the so-called market freedom myth and respected the assessment of professionals around the world by placing Shanghai and Hong Kong high up on global financial center rankings.
Angry as we are when the Heritage Foundation and similar institutions belittle China, including the HKSAR, we do not panic. Similarly, we are delighted by our ranking in the Global Financial Centres Index but not complacent about our achievements. The future of China, including the HKSAR, rests in the hands of the Chinese people, including Hong Kong residents. This year marks the beginning of China’s 14th Five-Year Plan (2021-25) and the 2035 Vision. Hong Kong must quickly put COVID-19 under control so as to resume normal personnel exchanges with the mainland. It is hoped that the Chief Executive and her governing team will maintain national awareness and stay committed to the great rejuvenation of the Chinese nation as well as its proactive role in the country’s overall development.
The author is a senior research fellow of China Everbright Holdings.
The views do not necessarily reflect those of China Daily.
