Hong Kong was ranked third in the latest Global Financial Centres Index 36 Report released in September. 

Given the strong initiatives proposed in the latest Policy Address to enhance financial innovation, attract family office and asset management business, and streamline IPO procedures and requirements, together with the city’s unique position in the Guangdong-Hong Kong-Macao Greater Bay Area and its talent and investor attraction initiatives (such as the Capital Investment Entrant Scheme), Hong Kong will likely overtake London to become the second-largest global financial center after New York before too long. 

Hong Kong has been the world’s largest renminbi offshore center for years. With the unstoppable rise in the use of the RMB in international payments and as a reserve currency, I wrote not long ago in this column (RMB Poised to Become a Safe-haven Currency Option, Oct 8, 2024) that the yuan is poised to become a preferred safe haven currency. A sign of this development can be found in a report in the South China Morning Post published on the seventh anniversary of Bond Connect, which noted that “since the link launched in July 2017, overseas holdings of onshore Chinese bonds have nearly quintupled to $580 billion”. The RMB’s share as a global payment currency rose from 3.5 percent a year ago to 4.7 percent in August of this year. Chief Executive John Lee Ka-chiu promised to set up a new fintech innovation ecosystem that will promote the development of innovative financial services including central bank digital currencies, mobile payment, virtual banks, virtual insurance and virtual asset transactions, while making it easier for companies to redomicile in Hong Kong so the city will become a “headquarters economy”.  

We can expect many more new RMB-denominated financial products to hit the market. And, apart from RMB-denominated products, Hong Kong developed a dedicated proof-of-concept subsidy program for green fintech in the first half of 2024 to promote the development of technological solutions and provide early-stage funding support for precommercialized green fintech, which will definitely become more important in years to come.

The Hong Kong Special Administrative Region government is aware of the difficulties that many small and medium-sized enterprises (SMEs) are still facing. It continues to lend support to SMEs through allowing flexibility in the repayment of loans under the SME Financing Guarantee Scheme and offering technical support to help them develop their markets through e-commerce and helping their transformation into the digital age

I am impressed that Lee actually delivered his proposals on the spot, saying that “starting from tomorrow”, foreigners working in companies registered in Hong Kong for business purposes can apply to the Chinese Visa Application Service Center in Hong Kong for multiple-entry visas valid for two or more years to the Chinese mainland. Expatriates based in Hong Kong will also have access to the huge and attractive hinterland for leisure purposes. This is a tantalizing proposition for professionals looking for the opportunity to put their expertise to good use and enjoy a better life. He also announced: “Starting from today, we will relax the visa policy in respect of employment for Vietnamese talent and the criteria for Vietnamese applying for multiple entry visas for business and travel.” This is speed.

I am pleased to learn from the Policy Address that Hong Kong ranked second in the world and first in Asia in the top 100 emerging ecosystems, according to the Global Startup Ecosystem Report (GSER) 2023. I was aware of Hong Kong’s startup ecosystem being very vibrant. That report is the first report from an independent organization outside Hong Kong that has endorsed Hong Kong as a startup paradise. Hong Kong scored 10 out of 10 in market reach and in talent and experience. Copenhagen, the first on the list, scored 10 in performance and in funding. Hong Kong scored 9 on both counts. InvestHK’s 2023 Startup Survey showed that both the number of startups and their number of staff employed reached a record high, with a total of 4,257 startups employing 16,453 staff. In any case, the GSER shows that we do have talent, and that they are delivering.  

Of course Hong Kong is not only attracting but also breeding talent on its own. Hong Kong boasts of being the only city with five universities among the global top 100. To further develop Hong Kong as an international tertiary education hub, Lee announced that the admission quota of nonlocal students to government-funded postsecondary institutions will be doubled to 40 percent from the 2024-25 academic year. To this end, the proposed Northern Metropolis University Town is ready to facilitate collaboration with renowned mainland and overseas institutions and with the industry sector. Hong Kong is not just a global financial center, but is set to become a significant contributor to the development of new quality productive forces. The Northern Metropolitan University Town is not far from the Hetao Shenzhen-Hong Kong Science and Technology Innovation Cooperation Zone, providing significant agglomeration benefits. 

The Hong Kong Special Administrative Region government is aware of the difficulties that many small and medium-sized enterprises (SMEs) are still facing. It continues to lend support to SMEs through allowing flexibility in the repayment of loans under the SME Financing Guarantee Scheme and offering technical support to help them develop their markets through e-commerce and helping their transformation into the digital age. The government is also keenly aware of the housing problem and has proposed a number of initiatives to deal with the housing problems for both young and old people, and the plight of those living in low-quality rooms in subdivided flats.

The author is an adjunct research professor at Pan Sutong Shanghai-HK Economic Policy Research Institute and Economics Department, Lingnan University.

The views do not necessarily reflect those of China Daily.