Singapore and Tokyo are poised for opportunity, but China’s shadow looms large
I recently chaired a panel in which a trio of grandees from Hong Kong, Tokyo and Singapore each staked their city’s claim to be Asia’s premier financial centre. The atmosphere echoed a family game of Monopoly running into its third hour: victory elusive, bonhomie fraying fast and no one quite sure whose turn it is next.
The debate was choppy, as participants navigated waters that have been thoroughly whipped up over the past 18 months, even without the additional disruption of Covid-19.
Street protests, troubling arrests and the passage of Hong Kong’s national security law in June have entrenched the theory that the former British colony’s status as a financial centre is in structural jeopardy. This may be a strategy by Beijing or the accidental consequence of China’s inexorable political instincts. There is legitimate disquiet among foreign financial institutions in Hong Kong. Their dilemma is not only about unquantifiable risk, constraint and where to draw their lines of tolerance, but how defiant to be when transgressions of those lines are made.
Despite the chill, the territory’s demise as a financial hub is a theory still awaiting a real test. Hong Kong friends in financial services repeat stories of international moving companies being run off their feet by departures, and they all know of someone or some fund planning to leave. They are circumspect on their own exit plans.