FS sells Hong Kong as the global wealth management hub

Financial Secretary Paul Chan Mo-po is currently flying the Hong Kong flag through Europe selling the city as the super-connector between China and the rest of the world, as well as it being the global wealth management hub.

Backing up Chan’s claims is the assessment of the International Monetary Fund (IMF), that Hong Kong has reinforced its position as a global financial center and super-connector between the Chinese mainland and the rest of the word. The city’s economy continues to recover from the COVID pandemic stronger than expected, supported by robust technology-related exports, improved private demand and a rebound in financial market activity.

It is the super-connector role that is central to sustaining Hong Kong’s position as a leading offshore renminbi (RMB) hub, as well as its involvement in the Guangdong-Hong Kong-Macau Greater Bay area and, of course, the Northern Metropolis development. Hong Kong is the primary gateway linking China with the rest of the world, a position reinforced by its status as an international financial center and its unique "one country, two systems" framework. Hong Kong also acts as a "super value-adder" by providing high-level professional services, legal expertise, and supply chain management that help mainland enterprises expand overseas, and global companies access the Chinese market.

Equity fundraising and asset management activity, key elements in Chan’s European mission, have picked up since the pandemic alongside improved market sentiment, reinforcing Hong Kong’s role as a global financial center and super-connector between the Chinese mainland and the rest of the world, particularly in its role as a leading fundraising hub and premier offshore renminbi center.

Hong Kong, with its common law legal system and headquarters for the International Arbitration Center, is a catalyst for China’s economy accounting for about two thirds of China’s inward foreign direct investment (FDI) and outward direct investments passing through the city. So, it not only provides a channel for goods and services to go global but also catalyses the international usage of renminbi (RMB) along the process. Since the launch of the pilot scheme for cross-border trade settlement in renminbi in 2009, RMB trade settlement handled by banks in Hong Kong sees exponential growth, recording RMB 64 trillion (HK$73.6 trillion) in 2024 (the latest available figure) or a quarter of China’s cross border trade in goods.

However, it still has a bit more to go to be a dominant settlement currency. In December 2024 the RMB was the fourth most active currency after the US, EUR and GBP, overtaking the Japanese Yen for the position. Using RMB for settlement allows companies to avoid the two to three per cent higher administrative costs associated with USD transactions, eliminates the need for currency hedging against RMB volatility, and provides access to Chinese trade finance products.

The IMF report goes on with a bullish Hong Kong line, citing the Middle East crisis, which Hong Kong could rapidly “transmit” given the city’s “high degree of openness and financial interconnectedness.” It predicts that over the medium term, growth is projected to normalize to around 2.25 per cent.

“The Hong Kong economy expanded robustly in the first quarter of 2026. Looking ahead, Hong Kong's economic growth outlook is positive, underpinned by strong global demand for AI-related electronics, sustained growth in visitor arrivals and robust cross-boundary financial activities,” the IMF concluded.

Chan’s European mission kicked off in Paris where he attended a meeting of the Association Francaise de la Gestion Financiere (AFG), the French asset management association which has shown a keen interest in expanding its presence in Hong Kong amid market diversification and significant growth potential in the Greater Bay Area asset management market. It also offers a pool of potential investors in the Northern Metropolis project.

The AFG is a must target for Hong Kong seeking to boost it FDIs. Some 330 member firms account for 90 per cent of the US$5.8 trillion (HK$45.4 trillion) in assets under management in France, while assets under management in Hong Kong jumped to HK$35.14 trillion (US$4.48 trillion) in 2024, just $41 million (US$5.2 million) short of the 2021 record.

While the Financial Secretary makes progress in Europe, the upcoming visit by Hong Kong Chief Executive John Lee to Kazakhstan and Uzbekistan in early June indicates a strategic shift eastward in these efforts. Together, their activities create a strong two-pronged effect: Chan attracts Western capital seeking access to China’s mainland market, while Lee opens new growth pathways along the Belt and Road, channeling Central Asian investment into Hong Kong and beyond. This joint effort directly supports Hong Kong’s role in China’s 15th Five-Year Plan (2026–2030), which highlights high-quality development, enhanced regional connectivity, and a “dual circulation” economic strategy. By positioning Hong Kong as a “hub-to-hub” bridge between Central Asia and East Asia and reaffirming its status as a global wealth management centre, the two officials are aiding the city in fulfilling its role as a premier offshore RMB centre, a super-connector, and a catalyst for cross-border trade and investment in line with the national blueprint.

The official visits overseas by Chan carries a simple message, Hong Kong is open for business. His purpose, as with other visits by government officials, is to counter, in part, all the negative publicity generated by the Jimmy Lai trial which suggests there are flaws in Hong Kong’s legal system, the backbone to the city’s successes.

Mark Pinkstone

** 博客文章文責自負,不代表本公司立場 **

When China’s Paramount Leader Deng Xiao Ping floated the idea of one country two systems for the future of Hong Kong, the west scoffed at the possibility of a communist regime and a capitalist bastion living hand in hand. Some 29 years later the prophets of doom were proven wrong as Hong Kong is now more prosperous than ever and it’s future will be more so.

For more than 150 years Hong Kong lived under a British colonial rule. There was no democracy, only authoritarian management. The succession of ruling governors were hand-picked by the Foreign and Commonwealth Office and appointed by the Prime Minister, without any consultation with the people of Hong Kong.

But the people of Hong Kong didn’t mind. If they had never seen democracy, how could they miss it. The governors were diplomats and their upper-crust training ensured that the natives were happy and that their rice bowls were filled. The diplomats got on well with the Chinese government as they knew that harmony was the key component to a successful relationship.

Then came along a politician for the first time to run Hong Kong in the name of Chris Patten, who had lost his seat in the Bath electorate, about 156 km west of London. John Major was Prime Minister at the time and a good friend of Patten. So, to make up for the political loss in Bath, Major offered Patten the cushy job of being governor of Hong Kong.

In 1992 Patten and his family arrived in Hong Kong and as a typical politician, he arrived like a bull in a china shop (pun intended). There was no diplomacy involved. Patten and Major had decided that the foreign office diplomats were pussy-footing with the Chinese during the previous decade negotiating Hong Kong’s future and a firmer stand was necessary.

Unlike his predecessors, Patten knew nothing of Chinese traditions and customs. He just could not understand Chinese mentality and that applied not only to the mainlanders but also the local Chinese. The East is East and the West is West and never the twain shall meet wrote poet Rudyard Kipling in 1889. But, in Hong Kong they did.

The Joint Declaration between Great Britain and China on the future of Hong Kong and the subsequent Basic Law (Hong Kong’s mini constitution) provided the pathway for Hong Kong’s future, including democratic elections for the city’s legislative council. But Patten was impatient and decided to introduce a fully elected legislature in 1995 immediately before the handover in 1997. This infuriated the Chinese-side, and they provided for a provisional legislature to replace Patten’s council as soon as Hong Kong was reverted to Beijing’s administration.

After 1997, Hong Kong formed its first directly elected Legislative Council in 1998, while the Chief Executive is elected by an Election Committee — a system similar to the U.S. presidential election. Hong Kong's Election Committee now has 1,500 members, whereas the U.S. Electoral College has only 538 members.

Since then, Hong Kong has flourished. The prophets of doom and Kipling were wrong. Despite many attempts by the west to dismantle the Deng formula Hong Kong is one of the most successful places on the planet. Year after year it is breaking records to the envy of many. Hong Kong has secured third place in the Global Financial Centres Index. In the latest World Competitiveness Ranking, Hong Kong's position has risen one spot further to rank second globally. And in the World Talent Ranking, Hong Kong has moved up 10 places to rank the fourth globally and the first in Asia. Hong Kong also continues to come first as the world's freest economy. And Hong Kong has what many want – stability.

The Hong Kong formula is unique and successful. Never tried before, it was seen as an experiment and the world was watching, waiting for it to fail. But the Hong Kong people are resourceful and will take any challenge head on. There is no failure.

The Hong Kong Special Administrative Region (HKSAR), established under the People’s Republic of China (PRC) Constitution, has maintained the previous capitalist system and way of life. Its common law system continues to operate, and it enjoys the free flow of people, capital, data, goods and more. The vibrancy and prosperity of the central government has always been Hong Kong's strongest backing.

Hong Kong’s 29th birthday under the PRC guidance, coincides with the 105th Anniversary of the Founding of the Communist Party of China. Naturally there have been celebrations all round, and justifiably so. Both Hong Kong and the central government are proud of what they have achieved. And both, particularly in the past year have taken top ranking as the preferred place in the world to trust and to do business.

Chief Executive John Lee, at a celebratory function on July 1 summed it up with: “Hong Kong, the Pearl of the Orient, will ride the wave of flourishing national development and sail with the wind, steering towards a brighter and more prosperous future!”

And the future is being mapped out in Hong Kong’s first five-year plan, currently under consultation with the public. The plan, a road map for future leaders to follow, will include a futuristic block of land, one third of Hong Kong’s total, to house high tech innovative research and development facilities with university, hospital and new town ancillary services. This Northern Metropolis straddles the river that acts as the boundary between Hong Kong and neighboring Shenzhen, with bridges linking the two; further proof that Hong Kong is an integral part of China.