Can Hong Kong endure as a financial centre?
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Can Hong Kong endure as a financial centre?

The economy is suffering as months of protests show no sign of abating. Banks have been targeted by demonstrators. So far, its financial markets have been largely unaffected. But surely it is only a matter of time before Asia’s greatest financial centre suffers too?




A 200-metre section of Queen’s Road East in Wanchai, one of Hong Kong’s main commercial thoroughfares, reveals the threats to this city’s standing as Asia’s premier financial centre.

Along here, a short shop-lined stretch punctuated by plate-glassed Tesla and McLaren car showrooms and hipster eateries, no fewer than six banks service local commerce; local banknote issuers HSBC and Standard Chartered, Singapore’s DBS, Hong Kong’s Bank of East Asia, Taiwan’s Fubon Bank and, directly next door to Fubon, Beijing’s state-owned Bank of China, which is Hong Kong’s third note-issuing bank.

Hong Kong’s competitive banking industry is one of its biggest economic earners, and these six banks reflect how keen that contest is, offering nuanced variations of the same products.

But only one of these banks now has the commercial disadvantage of a 24/7 security detail, a boarded-up shopfront and noticeably fewer customers: the Bank of China branch.

That’s because Hong Kong’s democracy protesters trash the Bank of China branch nearly every time they clash with the armed riot police ‘raptors’ (as the elite division of the Hong Kong police is known), something they have done repeatedly in the last seven months. To Hong Kong’s protest movement, Bank of China is a potent symbol of China – regarded by many Hongkongers as the occupying oppressor.

Eight months after rebellion first stirred within the ranks of Hong Kong’s 7.5 million population – a protest which initially was intended to resist a now-junked extradition bill from the Hong Kong government, but which has morphed into an anti-China, pro-democracy revolt – disorder has become a feature of daily life here.

Hong Kong’s stretched police force keeps a tally of its tear gas use; more than 10,000 gas rounds have been fired since June, affecting an estimated 88% of Hongkongers and raising fears of a public health crisis.

But the polarizing protests roll on, so far claiming two deaths, myriad injuries and almost 6,000 arrests, with no decisive end in sight.

Indeed, a strange duality has become normalized here. Flashmob rebellions will randomly break out at various locations across the city. Infrastructure is trashed and disabled, foot traffic vanishes and shops shutter as police and protestors exchange insults, rocks and tear gas for a few hours.

The air becomes thick with toxins, the pandemonium then subsides, allowing residents to emerge from lockdown. Urban services clean-up teams move in and within minutes businesses reopen to resume normal commerce.

Local revolt

Although foreigners have been affected by the protests, it’s very much a local revolt. At the Ladies Recreation Club, a sanctuary of expatriate privilege in Mid-Levels, a ‘crisis-what-crisis’ air pervades members’ brunch discussions much as it always has here, with chatter of business, deals and who’s doing what.

Expatriate joggers take their Sunday exercise around the banker-rich residential locale of Tregunter Path, where estate agent Knight Frank lists executive apartments to rent for as much as $36,000 a month. But were they to run just two minutes below to Lower Albert Road, they would be negotiating riot police arming in force outside the official residence of Carrie Lam, the Beijing-backed chief executive, in preparation for another ferocious weekend.

This societal schizophrenia is also evident in the city’s capital markets where, in spite of the turmoil, Hong Kong mostly continues to function as normal as Asia’s premier money centre. The government’s Financial Services Bureau, which administers a sector that contributes a quarter of Hong Kong’s GDP, insists markets have been operating routinely through the turmoil.

I remember when it was Citi and Bank of America who were trashed as symbols of imperialism. Now it’s China. Welcome to superpower-dom - US banker

The Hong Kong dollar has held firm to its stabilizing US dollar peg. ATMs have largely remained accessible and replenished with cash, and no bank has been subject to a run, or even a suggestion of one.

The blockades of Hong Kong’s international airport in September were subsequently thwarted, and regional business traffic continues largely unhindered to underpin Hong Kong’s regional influence.

As of early December, the benchmark Hang Seng Index is at almost exactly the same level it was a year earlier, albeit with sharp gyrations in the trading days in between.

Arguably more troubling for Hong Kong market analysts was the share price collapse of three China-linked stocks in a week in November – one fell 98% in a single day – events that had little to do with the protests and seemed more about mainland governance and regulatory shortcomings.

Bankers insist the turmoil hasn’t disrupted deal flow. Indeed, Hong Kong’s stock market has enjoyed a boom year in new share listings, particularly from China. Dealogic calculates there were about $35 billion in new floats in 2019, bettering 2018’s $33 billion.


Carrie Lam’s Hong Kong administration is under pressure not just from protestors, but from the protests’ impact on the local economy 

On November 26, two days after Hong Kong voters had roundly rejected pro-China candidates in a local election, Chinese-owned Alibaba made a successful $13 billion debut on the Hong Kong stock exchange, the biggest float in the world in 2019 – at least until the Saudi state oil firm Aramco raised more than $25 billion in December in Riyadh.

Alibaba was Hong Kong’s biggest float in a decade and was seen as both a reiteration of confidence by China in the territory and a snub to the US at a time of president Donald Trump’s threats to delist New York-traded Chinese stocks as part of its trade war with Beijing.

For the most part, in business and in banking, people have decided that the best policy is to be neutral and say nothing even if asked.

But barely a single branch of a Beijing-owned bank – be it one of BOC’s 200 outlets, ICBC’s 59 or others like CCB, China Citic Bank and Bank of Communications – has been left untouched, even outlets inside buildings.

BoC’s Hennessy Road branch in the once-thriving retail precinct Causeway Bay now finds itself on the main protest route from Victoria Park to Central: while the neighbouring Citibank branch is undamaged, its Chinese competitor gets smashed nearly every time a demonstration passes.

“I remember when it was Citi and Bank of America who were trashed as symbols of imperialism. Now it’s China. Welcome to superpower-dom,” says a US banker who has lived many years in Asia.

Perhaps it is no surprise this dynamic entrepôt retains its lustre for bankers and others in the financial sphere.

Dozens of reports and surveys show that Hong Kong surpasses many other cities in the world, including the biggest in China, thanks to its rule of law, ease of doing business, free movement of capital and other factors that are mostly lacking or undeveloped on the mainland.

Strict capital and information controls and the lack of renminbi convertibility are frequently cited as negatives for leading Chinese cities such as Shanghai.

Take the World Economic Forum’s global competitiveness report from 2019, based on data collected before the protests, in which Hong Kong rose four places to rank third overall, behind Singapore and the US.

Hong Kong ranked first for four measures – the most of any economy – macroeconomic stability, health, financial system and product market. Furthermore, it ranked third on infrastructure and ICT adoption.

In AT Kearney’s 2019 global cities report, Hong Kong retained its position in fifth place behind New York, London, Paris and Tokyo – and ranked ahead of Beijing (in ninth place) and Shanghai (in 19th).

A joint report entitled ‘Chinese cities of opportunity 2019’ by PwC and China Development Research Foundation ranked cities using several different measures. Hong Kong came top in terms of economic clout and ease of doing business.

Struggling businesses

But despite the Chinese and Hong Kong government’s frequent assertions of business as usual for the territory, the unrest has damaged the wider local economy, prompting the government and local tycoons to intervene with a series of stimulus and support packages for struggling businesses.

Finance secretary Paul Chan Mo-po, who prefers to describe the demonstrations as “social events,” says that Hong Kong’s budget will be in deficit for the first time since 2004/05, when the territory was still recovering from the impact of SARS, or severe acute respiratory syndrome.

“The social events have inflicted tremendous harm on our economy,” Chan says. “Local people are not in the mood for spending. According to our economists’ estimate, the losses caused by the social events account for about 2% of the city’s GDP.”

Hong Kong sank into recession for the first time in a decade in the third quarter of 2019, when the economy shrank 3.2%, thanks to anti-government protests and the US-China trade war.

The social events have inflicted tremendous harm on our economy... According to our economists’ estimate, the losses caused by the social events account for about 2% of the city’s GDP - Paul Chan Mo-po, finance secretary

Fitch Ratings cut its rating of Hong Kong-issued debt to double-A with a negative outlook in September, from an earlier AA+ rating with stable outlook, citing the negative impact of the protests. In December, Fitch predicted Hong Kong’s economy would contract 1.5% in 2019.

There are also as yet unrealized fears of capital flight. A Goldman Sachs report in October estimated that between $3 billion and $4 billion in cash had left Hong Kong and gone to Singapore as protests intensified in September.

That report is believed to have prompted Hong Kong’s central bank, the Hong Kong Monetary Authority, to deny the territory’s financial system was leaking, even though statistics from the Monetary Authority of Singapore showed that foreign-currency deposits by non-bank customers rose more than 50% in August compared with a year earlier.

Hong Kong authorities are reportedly considering introducing a suite of incentives to support the private banks and family offices that comprise Hong Kong’s $1.5 trillion wealth management sector, Asia’s largest.

Hong Kong’s tourism sector has been particularly hard hit because it depends heavily on visitors from mainland China. In December, the Hong Kong government’s Census and Statistics Department reported that retail sales had plunged 24.3% in the year to October.

Shopkeepers say their normally bustling streets are as quiet as they’ve been since SARS ravaged the economy in 2003.

The restaurant trade has suffered its deepest slump in takings since that epidemic. In September, Hong Kong hotel occupancy rates were tracking at about 60% to 65%, down 25% on a year earlier, but the escalation of violence in November is believed to have sent that number down even further since.

Hong Kong International Airport handled 5.02 million passengers in November, a drop of nearly a million, or 16%, from a year ago. Tourist arrivals from the Chinese mainland, long Hong Kong’s biggest source of tourists, are down 40% in 2019. According to the Hong Kong Tourism Board, there were 3.31 million arrivals in October, down 43.7% from the same month in 2018.

At The Peak shopping mall, a favourite haunt of mainland Chinese tourists, retail traffic is down 80%, local traders say. Before May, commuters on the famous Peak tram would queue for three or four return cycles before getting on board. In November, one could walk onto a quarter-full tram at leisure.

Lunchtime demonstrations in Central have become commonplace and many office hours have been lost. On November 13, sustained protests forced 20% of Hong Kong’s bank branch network to close, the most ever on a single day apart from those days when Hong Kong is shut down by a typhoon. HSBC, Standard Chartered and Hang Seng Bank directed staff to work from home.

“Customer and staff safety are our top priority,” says Hang Seng, the bank where Hong Kong identity has been a defining element of its corporate culture. “We remain vigilant on activities in the community and implement the necessary security measures when appropriate, including the temporary closure of bank branches.”

A former Hang Seng senior executive tells Asiamoney: “This is madness; we must learn to embrace the reality that we are part of China.”

The turmoil is starting to impact on local bank earnings. The Li family’s Bank of East Asia reported a 75% drop in its first-half profit, while warning that the protests and an escalation of the US-China trade war will further weigh on the economy.

London-based HSBC, which derives 90% of its profit from Asia – and much of that from Hong Kong – saw its Hong Kong earnings rise just 1% to $3 billion in the quarter to September, while projecting a $90 million credit charge directly attributable to the deterioration in Hong Kong operating conditions.

Interim chief executive Noel Quinn has said that some of HSBC’s ultra-high net-worth clients were opening accounts outside Hong Kong as a contingency plan.


So far, say local bankers, Hong Kong’s capital markets have survived months of social unrest largely intact

Management difficulties

With large local and mainland staff, the unrest presents unexpected management difficulties for Hong Kong-based foreign banks in handling their emerging franchises in China.

In October, a mainland Chinese investment banker at JPMorgan was taunted outside his office in Central. When he appealed in Mandarin Chinese to Cantonese-speaking hecklers that “we are all Chinese,” words often deployed by officials to exhort national unity, he was attacked by a masked protester.

That attack appalled the banking community. JPMorgan’s Hong Kong chief executive Filippo Gori thanked his staff “for pulling together and supporting each other, and our clients, during what has been a difficult period in the city.”

After this incident, JPMorgan’s chief executive and chairman Jamie Dimon told US TV programme 60 Minutes: “I think it’s very, very important that they have a peaceful outcome. A bad, unpeaceful outcome (in Hong Kong) would be bad for everybody, including the Chinese.”

Asked if he was expecting a bad outcome and if JPMorgan had planned escape routes, Dimon said: “If you’ve heard me talk about this company, we always prepare for bad outcomes… unfortunately, yes.”

In September, French bank BNP Paribas was tested when the head of its debt capital markets legal team, Jason Ng, suddenly left the bank to become a full-time activist after criticizing pro-China protestors on his private social media accounts. BNPP’s chairman Jean Lemierre was quick to apologize, saying Ng’s remarks “did not reflect the view of BNP Paribas.”

Lemierre told the business network CNBC that Ng’s “inappropriate words were not compatible with the standards of the bank. This is not the way bankers should behave.”

Ng didn’t say if he was sacked or had resigned but said he stood by his “monkey see, monkey do” comments and bore no ill will toward his decade-long employer.

Lemierre insisted he wasn’t worried by Hong Kong events: “We see a high degree of stability. Everybody is operating in a normal way.”

Citibank also warned its staff away from confrontations. That directive came as a Citibanker, believed to be from its capital markets unit, was arrested in November by police in an incident widely circulated on social media.

A video of the arrest shows a group of officers in riot gear questioning a man who said he worked at Citibank. As police officers insult the man, he tries to break away only for police to wrestle him to the ground. Proclaiming his innocence, he implores the media to record the “illegal arrest” as officers claim that he is assaulting them.

Hong Kong’s turmoil has also affected office morale and productivity, with sharp divisions emerging between local staff and mainlanders, and between protest supporters and opponents.

Cultural and linguistic silos have formed, described by one banker as “an office apartheid.” Anecdotes abound across the banking sector of pro-democracy staff shunning China-supporting colleagues, of mainland staff avoiding Hongkonger colleagues, regardless of their inclination, and of managers threatening dismissal of “unreliable” employees.

But a 52-year-old Hong Kong stockbroker that Asiamoney encountered held a different view. He works for a mainland-controlled securities firm.

“I don’t care,” he says. “I already earn enough. Many people my age, they want to earn their fortune so they bow themselves to the CCP (Beijing’s ruling Chinese Communist Party). But what about our future, my children’s future?”

When Asiamoney met this broker, he was marching with hundreds of fellow Hongkongers from Victoria Park in Causeway Bay: that Halloween demonstration ended in bedlam in Central when police fired tear gas canisters that landed among protestors outside outlets for luxury brands Louis Vuitton and Tiffany’s.

It wasn’t the first time the broker/protestor had been out on the streets.

He says he has marched very often, “almost every gathering”, and sometimes with his children. He’s been questioned by police but never arrested.

“I’m too old,” he laughs.

Treading carefully

Hong Kong executives are concerned China will increasingly demand publicly stated fealty from corporations as a condition of doing business in China.

Foreign banks are especially worried, as they seek to take independent control of China-based operations during Beijing’s ongoing liberalization of its financial system.

“All of us have to tread very carefully,” says a Hong Kong-based foreign banker who did not want to be named.

Three banks, BNP Paribas, UBS and Macquarie, were cited in a Financial Times report in December for avoiding mention of Hong Kong’s protests in their economic research for clients lest local sensitivities be upset.

Business has also been guided by the experience at Hong Kong’s flag-carrying airline Cathay Pacific, which is controlled by the British-Hong Kong Swire Pacific but part-owned by Chinese carrier Air China.

With a quarter of its commercial traffic to China, the airline faced extreme pressure from Beijing authorities who wanted Cathay management to take a tougher line against protestors working at the airline, at one point demanding that the airline provide advance information about crew members staffing mainland-bound routes.

Cathay’s American chairman John Slosar resigned in September, soon after saying: “We employ 27,000 staff in Hong Kong doing all sorts of different jobs, we certainly wouldn’t dream of telling them what they have to think about something.”

Three weeks earlier, the airline’s British chief executive Rupert Hogg was forced out. Trade unionists in Hong Kong claim that the airline has dismissed more than 30 staff, including pilots and cabin crew. Cathay Pacific did not respond to questions from Asiamoney.

At China’s state-owned Bank of Communications, its well-respected Hong Kong-born chief economist Law Ka-chung claimed in December that he was forced to resign from the bank because he was a Hongkonger, prompting concerns of a cultural purge in business ranks.

Law said the bank’s management was unhappy with his remarks that the SARS epidemic of 2003 had a sharper impact on the city’s economy than the protests, an argument that contradicts the official position of the Beijing-supported Hong Kong government.

“After a crackdown, we can expect an Erdogan-style purge of civil servants and staff of government contractors for opinions expressed on their social media accounts,” says prominent corporate governance activist David Webb. “The private sector would not be immune. If employees have not already locked down their social media pages, then it is probably too late. This inverse McCarthyism will accelerate the brain drain from Hong Kong.”

Chinese state media has already urged Hong Kong-based firms to “fire employees found to have the wrong stance on the Hong Kong situation.”

But Kenneth Leung, elected to represent Hong Kong’s accountancy constituency in Hong Kong’s quasi-parliament, or Legislative Council (LegCo), says the majority of his voters, many of whom have business interests in China, support the protest movement. That’s because many fear pressure from influential Chinese firms could make it impossible for professional accountants and auditors to do their job independently.

Leung says this could have serious implications for the veracity of company accounts and corporate governance, eroding Hong Kong’s reputation for professional integrity.

The big four accountancy firms – PwC, Deloitte, KPMG and Ernst & Young – published statements in August distancing themselves from a full-page advertisement in Hong Kong’s Apple Daily newspaper in support of the demonstrations that was signed and crowdfunded by an anonymous group of “Big Four Accounting Firms’ Employees,” and declared: “We will never fear or compromise with injustice and unfairness.”

PwC said the advertisement “does not represent the firm’s position. We firmly oppose any action and statement that challenges national sovereignty.”

A week after that PwC statement, Leung led a protest march of 5,000 accountants through Central demanding full democracy, opposing the extradition bill and demanding an inquiry into alleged police violence against the protest movement. “China has to learn the bitter lessons,” Leung says. “They are still the CCP (Communist Party of China) in tight control.”

Professor Zhiwu Chen of the Asia Global Institute, an economic-oriented thinktank at the University of Hong Kong, says: “I don’t think many officials on the mainland realistically expect foreign firms to declare their loyalty to China or the communist party. I would say the mainland officials expect multinationals doing business to follow, to obey those red lines they have drawn. Most Chinese people expect foreigners, foreign firms to be different. Some foreign businesses have overdone it in terms of their compliance.”

Five demands

So where does all this go? Officials had hoped the November 24 district council elections, when pro-Beijing candidates were routed, would be a circuit-breaker. And for a week it looked as if it was, as protestor numbers dwindled.

But by December, mass protests had resumed, with demonstrators insisting on their five demands: a permanent withdrawal of the extradition bill; an inquiry into alleged police brutality; an end to the official description of protestors as ‘rioters’; an amnesty for arrested protestors; and universal suffrage to elect Hong Kong’s parliament and chief executive.

Pro-Beijing demonstrators also hit the streets in a ‘Love the country, safeguard Hong Kong’ rally, demanding an official recount of what they described as the “rigged” November 24 district council polls.

LegCo member Leung believes Hong Kong’s economy can quickly bounce back once calm is re-established. But longer term, he says Hong Kong is “too reliant’ on China.

“China is outraged by everything,” he says. “We need to diversify.”

As for Hong Kong’s mooted eclipse by Shanghai or Shenzhen, Leung says: “If the capital restrictions are still on in China, and there’s no access to internet, forget it.”

Chen of the Asia Global Institute has a disarmingly simple solution to Hong Kong’s crisis: “I think if I was advising the main decision-makers in Beijing, I would strongly recommend leaving Hong Kong alone just as it has been done before.”

The pragmatic approach is to stay with the one country, two systems and let Hong Kong be a genuine autonomous region within the People’s Republic of China. That’s to best advantage the Chinese nation both near term and long term - Professor Zhiwu Chen, Asia Global Institute

Chen’s view matters. He is one of China’s most authoritative public intellectuals, particularly on economic matters. A professor of finance at Yale University for 18 years until 2017, he has been a director at China’s state-owned Bank of Communications, oil giant PetroChina and has served on the international advisory board of the China Securities Regulatory Commission.

He has almost 11 million followers on Weibo, China’s officially approved version of Twitter.

“The pragmatic approach is to stay with the one country, two systems and let Hong Kong be a genuine autonomous region within the People’s Republic of China,” he says. “That’s to best advantage the Chinese nation both near term and long term.”

Chen says Beijing has so far been restrained in handling the challenge of Hong Kong: “We have to accept the fact that Hong Kong society is quite different. Younger generations have been exposed and educated with a lot of modern internationally accepted values. Trying to convert Hong Kong into a city like Shenzhen or Shanghai, that’s going to be hard. It’s not practical. It’s not feasible.

“It will take several generations, but then the current middle-aged to young generations, no one can wipe out the values they have. So what are you going to do? Are you going to keep fighting this guerrilla war like in Northern Ireland?”

A “mainstream view,” he says, among Beijing’s “elite advisers and policy makers” is that Hong Kong is “no longer so important to the mainland” and can be side-lined in favour of alternative centres in China.

But Chen says this view that mainland decisionmakers are unwilling to make concessions in Hong Kong “has not really helped relieve the discontent.”

Chen spoke to Asiamoney in early November: about a week later, protestors at Hong Kong’s Polytechnic University began a 12-day siege of the campus, one of the most serious incidents of the eight-month protest campaign.

Chen warns that if the random violence and the increasing sense of insecurity continues for a further one or two years, more people will leave Hong Kong in what he describes as a “human capital flight” of local, mainland and foreign professionals who have “made Hong Kong a very important and crucial bridge between China and the world.”

He identifies the investment banking, legal and accounting professions as particularly susceptible.

“Unfortunately those people who may be likely to move out within the next two years are not easily replaced,” he says. “Couples with young kids are really evaluating the options. That will indeed make Hong Kong no longer a valuable partner or part for the mainland.”

As social divisions sharpen, Chen, a three-year resident of Hong Kong, says mounting xenophobia toward mainland Chinese who do not speak Cantonese could subject them to more risk of being attacked by what he described as “underground radicals.”

And the violence dismays him: “I worry about many of my friends. It’s unfortunate to see such a great human creation that is the Hong Kong economy, Hong Kong society, get destroyed.”

Chen also has some advice to international businesses in China and Hong Kong: “I think for any international company that wants to keep a meaningful presence in the Chinese market, the Chinese economy, their best shot is still to have Hong Kong as their main base, main bridge.

“The level of professionalism among Hong Kong people is not matchable by any group in any mainland city. Shanghai has the most professionally savvy supply of potential employees, but is still not as good as what Hong Kong has to offer.

“Hong Kong has benefited from being the bridge between China, and the world but mainland China has benefited much more,” he says. “It’s very popular among mainland people to think that it is the mainland that has helped Hong Kong’s economy grow for the last four decades.

“That is true, without the mainland economy doing better and better, Hong Kong would not have experienced this kind of growth, but without Hong Kong providing this bridge role between the mainland and the world, the mainland would not have been able to achieve this kind of growth.

“As the mainland has been tightening up its control of the internet space and of the speech space, for the employees of international corporations, if their key people are based in Hong Kong, for some years to come Hong Kong can still enjoy more freedom, more flexibility and more internationally savvy human capital. No other city within China can match (Hong Kong’s) internationalization level.”


Is history against Hong Kong?

“If we burn, you burn with us.”

Of the many slogans coined and appropriated by Hong Kong’s protest movement during the summer of unrest, this from the dystopian series The Hunger Games, is perhaps the most nihilistic. And could well prove to be the most prophetic.

The world has seen how Hong Kong has burned during this year. But are we also witnessing the flame-out of the world’s third most important financial centre, of Asia’s biggest asset- and wealth-management centre, and insurer, and generator of public share offerings?

Nothing is for ever, as historians of Venice, Bruges, Antwerp and Amsterdam can attest, and maybe of London too if Brexit goes badly. Asia has seen Rangoon come and go as a strategic commercial hub, and Colombo, and the biggest of them all at the time, Shanghai, after Mao Zedong’s 1949 revolution.

Too early to call? Of course, but these are the types of apocalyptic discussions being considered by the influential of Hong Kong. Eschatology is suddenly a thing in Hong Kong salons, especially if China’s troops go in – as they did in Tiananmen Square in 1989 – or even if they don’t.

Medieval Venice was the Hong Kong of its day, a laissez-faire strategic trading entrepôt of economic stability and technocratic efficiency, with an enormous hinterland as its market. Cosmopolitan Venice financed the papacy and was a financial innovator too, the first state entity to issue government bonds. 

Venetian prestiti were a tax – to raise a navy to defeat commercial rival Constantinople (modern-day Istanbul) – but with a twist; the government paid its taxpayers back in incentivized increments.

French economic historian Olivier Coispeau might as well have been describing modern-day Hong Kong in his 2016 study ‘A brief history of international financial centers in the last millennium’: “Venice was a trusted and attractive place to do business with an influence far beyond its borders.” 

But as Coispeau also describes, the Venetians got complacent, failing to notice and act when rivals emerging in western Europe and in the surging Ottoman Empire to the east squeezed Venice, making it irrelevant.

Again, mindful of Beijing’s recent attacks on Hong Kong’s previously lionized property barons, such as Cheung Kong’s Li Ka-shing, Coispeau again could be describing Hong Kong when he writes “a final weakness of the Venetian state was probably the profound division between its entrenched oligarchs on the one hand and, on the other hand, the mainland and its local elites.”

After Venice came Bruges and the world’s first letters of credit, Antwerp – the first bourse – and Amsterdam, with its futures markets and the world’s first genuine multinational corporation (also responsible for the world’s first IPO), the Dutch East India company. 

All rose brilliantly, only to fall hard into obscurity as primacy shifted to London and then, as the US rose as a superpower, to New York.

Will Hong Kong be the next financial centre to be eclipsed? In business terms, the easiest option for Beijing’s strongmen might be not to agonize over how to accommodate the territory’s surging democrats, or to crush them militarily, with all the damaging international opprobrium that would generate, but to just forget about Hong Kong, to sideline it for somewhere more reliable.

As a Hong Kong-based foreign banker noted to Asiamoney during November’s turmoil, in practical terms it costs relatively little to re-locate staff, close a rented office or branch, or move money.

An influential global analysis of world’s business centres – the Global Financial Centres Index, compiled by London business thinktank Z/Yen Partners and the China Development Institute – ranked three mainland Chinese cities in its top 10 in 2019: Shanghai (fifth), Beijing (seventh) and Shenzhen in ninth place, and in the world’s top 10 for the first time.

Hong Kong’s under-secretary for financial services Joseph Chan, speaking for a government widely criticized as complacent, says he can’t see any Chinese city emulating Hong Kong’s “specialness”. 

No Chinese city has the same freedom of capital flow or of information, he says. The transparent legal system that business relies on too is different in China. 

That might be what complacent Venetians and Amsterdammers once said about their rivals too.

Things change. Money craves stability and tends to be light on morals. 

At a time when cash and people are as portable as they’ve ever been, international finance with designs on Asia (read China) could be sufficiently incentivized if the burning is persuasive enough.

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