HONG KONG IS QUIETLY making deep connections to both Mainland China and the wider world to secure its future.
The city is:
- Testing next-generation Chinese government digital currency for use in cross-border payments;
- Gathering mainland currency to a level of almost one trillion renminbi;
- Issuing bonds for China’s stand-out performers, such as Shenzhen and Hainan Island.
- Pioneered the development of virtual banks with no physical premises; and
- Growing a major fin-tech sector, with 800 companies and start-ups.
There were many quiet revelations at a conference of top business people and government ministers in Hong Kong yesterday. It drew a picture of an active, buzzing community which is taking advantage of its position as a little pocket of financial genius embedded in the fastest growing part of the world: East Asia.
Speaker after speaker emphasized the theme of fostering collaboration with the mainland and the global community. In that sense, the forum was in sharp contrast to US leader Joe Biden’s recent “Summit for Democracy” which fostered the division of the world into a pro-US bloc versus “autocrats”.
Academics know the importance of global collaboration, and Greater China’s best universities stand to become the world’s top universities if they can stay plugged into the system, Harvard University professor William C Kirby told the meeting.
“My team and I believe in the power of communication and the value of co-operation,” Hong Kong leader John Lee Ka-chiu said at the Our Hong Kong Foundation International Forum on Progress through Collaboration.
Another recurring theme of the meeting was technological change. Pilot tests are taking place on the use of e-CNY in cross-boundary payments,” Hong Kong Chief Executive John Lee revealed. “And that only underlines our deepening collaboration with the Mainland in technology.”
The astonishing growth of Shenzhen into Asia’s tech capital is well-known. But Shenzhen and its neighbor city stand to grow further as they take advantage of Hong Kong’s financial skills, the meeting was told by several speakers.
As de-dollarization trends as a discussion topic, the world is looking for the rise of other large currencies, such as the Euro and the Renminbi. Hong Kong is well placed to benefit.
“At the end of 2022, Hong Kong’s Renminbi deposits reached nearly one trillion,” Lee said. “Hong Kong processes about 75 per cent of global offshore Renminbi payments.”
Cross-border co-operation in currency is already strong. “Last year, the governments of Shenzhen and Hainan issued offshore Renminbi local government bonds in Hong Kong,” Lee said.
“With each issuance amounting to RMB5 billion, these welcome moves would boost the Renminbi financial products available here, while promoting the internationalisation of the Renminbi.”
Outspoken business leader Ronnie Chan made the point that Hong Kong’s future was indelibly connected to the country which the city was part of. And most Hong Kong people were wise enough to see this.
Image at the top from Tim Durgan/Pexels.