Chinese netizens: Hong Kong now an international financial centre 'heritage site'

Hong Kong’s position as an international financial centre is now a thing of the past as multinational corporations withdraw from the city and its stock market shows signs of foreign capital outflows. Lianhe Zaobao journalist Tai Hing Shing finds out if Hong Kong’s financial market is truly on its way down.
A screen showing the Hang Seng Index is seen outside Exchange Square, in Hong Kong, China, on 18 August 2023. (Tyrone Siu/Reuters)
A screen showing the Hang Seng Index is seen outside Exchange Square, in Hong Kong, China, on 18 August 2023. (Tyrone Siu/Reuters)

Mainland Chinese netizens have recently alleged that Hong Kong will soon become a “heritage site” and that its days as a global financial hub are finished. One can even find travel guides on visiting the "heritage site” on Xiaohongshu.

Hong Kong Secretary for Financial Services and the Treasury Christopher Hui hit back on 1 December, asserting that such claims do not hold water. However, some in the business community said that this is indeed a possibility.

Heritage site in the making?

Hong Kong has always been an eminent international financial centre and business hub. But multinational corporations started withdrawing from Hong Kong a few years ago, and have continued to do so even after the pandemic. 

The stock market is also showing signs of foreign capital outflows. After being surpassed by Taiwan’s stock market index on 28 November, the Hang Seng Index remained weak on 29 November, closing at 16,993.44. The Taiwan Weighted Index closed at 17,370.56 that day, 377.12 higher than the Hang Seng Index, surpassing the Hong Kong stock market for the first time in 31 years in terms of closing price.

People walk past a screen displaying the Hang Seng Index at Central district, in Hong Kong, China, 6 December 2023. (Tyrone Siu/Reuters)
People walk past a screen displaying the Hang Seng Index in Central district, Hong Kong, China, on 6 December 2023. (Tyrone Siu/Reuters)

Since August and September this year, claims that Hong Kong was about to become a “heritage site” appeared on mainland Chinese social media platforms such as Weibo, Xiaohongshu and WeChat. This was because the daily turnover of Hong Kong stocks has dropped sharply and the trading volumes of several listed companies have slumped.  

On Xiaohongshu, apart from taking pictures at various road signs around Hong Kong, a new way to travel has recently emerged. Some netizens shared, “I was touring Hong Kong during the National Day holiday, and have come to visit the Asia financial centre heritage site.” Others specially visited Exchange Square, which houses the Hong Kong Stock Exchange, and took photographs with the caption: "Global financial centre heritage site with zero trading volume." 

Turning to other markets?

Seeing that such topics are starting to gain traction, Hui rebutted on his blog on 1 December that Hong Kong’s financial market is “internationalised”, “comprehensive” “growing in nature”, has a “solid foundation” and is resilient. Notwithstanding macroeconomic factors such as the uncertain global economic outlook, several businesses are still growing, proving that such claims are unfounded. 

Pedestrians walk past the electronic ticker displaying stock figures at the Exchange Square Complex, which houses the Hong Kong Stock Exchange, in Hong Kong, China on 20 November 2023. (Paul Yeung/Bloomberg)
Pedestrians walk past the electronic ticker displaying stock figures at the Exchange Square Complex, which houses the Hong Kong Stock Exchange, in Hong Kong, China, on 20 November 2023. (Paul Yeung/Bloomberg)

Hui pointed out that Hong Kong’s financial market had been affected by unstable geopolitics, and is also restricted by macroeconomic factors such as an extended high-interest rate environment. These factors have impacted share trading and the short-term performance of IPOs. However, he added that growth was still recorded in certain areas of the market, such as securities and futures, asset and wealth management services, and insurance services.    

He cited examples that the total market capitalisation for Hong Kong’s securities market at the end of October 2023 reached HK$30.8 trillion (US$3.94 trillion), which was up 17% year-on-year from last year’s HK$26.4 trillion. Furthermore, in the first ten months of 2023, the average daily turnover for exchange-traded funds reached HK$11.6 billion, up 25% year-on-year. Also, the average daily volume of futures and options for the first ten months of 2023 reached 1.35 million contracts, an increase of 7% compared with the same period last year.

... as Hong Kong stocks continue to fall, many industry insiders have already switched to trading US stocks, while a number of them have lost their jobs or are changing industries. — Micro Chow, Hong Kong finance columnist  

However, Hong Kong finance columnist Micro Chow told Lianhe Zaobao that Hong Kong’s finance sector is currently stuck in a quagmire. On the surface, it appears to have a large amount of capital, but a major portion of it is propped up by investment funds from mainland China. He stated that as Hong Kong stocks continue to fall, many industry insiders have already switched to trading US stocks, while a number of them have lost their jobs or are changing industries.     

Chow criticised the Hong Kong government for being all talk with regard to developing the finance sector. He said, “For example, with Europe and the US decoupling from China, the Hong Kong government claims to want to open up the Middle East market, but Hong Kongers have zero knowledge about this region. Even now, Hong Kong universities do not have classes to learn about the Middle East or Islam.” 

More efforts needed for recovery 

Hong Kong businessman and chairman of Centaline Property Agency Shih Wing-ching penned an article published on 1 December by Am730, a paper under his company. It stated that based on actual, real-world developments, Hong Kong could very likely become a “global financial centre heritage site” — this could very well become a reality if the matter continues to be taken lightly without all-out efforts towards recovery.

Although the mainland has gradually stepped up on investment, it is not easy to gain unrestricted access to these funds and use them in line with the interests of Hong Kong. — Shih Wing-ching, Hong Kong businessman and chairman of Centaline Property Agency

 A view of the Henderson, one of Hong Kong’s newest skyscrapers built on some of the most expensive land in the world, in Central business district of Hong Kong on 5 October 2023. (Peter Parks/AFP)
A view of the Henderson, one of Hong Kong’s newest skyscrapers built on some of the most expensive land in the world, in Central business district of Hong Kong on 5 October 2023. (Peter Parks/AFP)

Shih pointed out that for Hong Kong to be an international financial centre, it needs to be supported with capital, but the cross-border flow of the renminbi is still too restrictive. Although the mainland has gradually stepped up on investment, it is not easy to gain unrestricted access to these funds and use them in line with the interests of Hong Kong. 

Although the investment capability of Hong Kongers is comparable to that of the people from European countries and the US, Hong Kong has a small population of only 7.5 million, making it difficult to solely rely on itself to prop up an international financial centre. Shih opined that there is a need to woo European and US investment back to Hong Kong for a chance for the city’s finance sector to prosper.  

This article was first published in Lianhe Zaobao as “香港快将沦为“国际金融中心遗址”? 财经高官强烈反驳”.

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