Financial center eyes deepened role through connect with mainland

As the Hong Kong Special Administrative Region celebrates the 25th anniversary of its establishment on July 1, the city's financial industry is set to unveil a new glorious chapter in the annals of its development, fueled by deepening financial connectivity with the Chinese mainland, a booming offshore renminbi business and green finance.

In the past two and a half decades, Hong Kong has strengthened its position as an international financial center. Financial services－one of the SAR's pillar industries－have played a pivotal role in its economic growth, contributing 23.4 percent of the local GDP in 2020, doubling from 10.3 percent in 1997, according to official statistics. More than 273,700 people worked in the sector in 2020, accounting for 7 percent of the city's labor force.

Employment and the value added of financial services grew by 4 percent and 12 percent respectively between 2018 and 2020.

Although Hong Kong's economy has been hard hit by social unrest and the COVID-19 pandemic over the past few years, the city's position as a world financial hub has remained intact, given the SAR's competitive advantages of a sound financial infrastructure, a developed legal system, a highly skilled talent pool, and proximity to the vast mainland market.

Hong Kong has remained in third place in the global financial-center rankings, after New York and London, according to the latest Global Financial Centers Index jointly published in March by Shenzhen-based think tank China Development Institute and London-based think tank Z/Yen.

In a report released in the same month, the International Monetary Fund reaffirmed Hong Kong's status as a major global financial center, saying the city's financial sector has continued to expand robustly despite COVID-19.

"Since 1997, Hong Kong has overcome many severe external shocks, including the Asian financial crisis, the dot-com bubble burst, the SARS outbreak, and the COVID-19 pandemic. Each time, Hong Kong rebounded swiftly and leveraged these setbacks to keep enhancing its transparency and regulations, increasing fiscal reserves and grooming more talent to ward off similar challenges," said Eden Wong Yi-dung, president of CPA Australia Greater China Division.

"Such resilience is pivotal in building global investors' confidence in Hong Kong's mature financial system and the city's ability to withstand turmoil. It's an essential trait for Hong Kong to stand out from other places and become a leading financial center."