With Hong Kong riven by political deadlock, politicians and investors have repeatedly warned in recent years that the financial centre risks sliding into irrelevance as its Chinese rivals Shanghai and Shenzhen go from strength to strength.
But some argue that China』s latest bout of stock market turmoil — and Beijing』s panicked response — has provided an unexpected boon to Hong Kong, highlighting the open nature of its financial markets and its more robust regulatory system.
「China is involuntarily sending a signal that it』s not yet ready to open its financial markets and that』s good for Hong Kong,」 said the chief financial officer of one leading Hong Kong-listed company.
This attitude underlines the strange duality of Hong Kong』s economic position. On the one hand, the semi-autonomous Chinese territory』s prospects are deeply intertwined with the mainland — and it sells itself as a gateway to China. On the other, government officials and investors promote Hong Kong』s stark contrasts with China, with an independent legal system, free speech and currency pegged to the US dollar, not the renminbi.
Last week Beijing rushed to implement a package of measures designed to arrest the slump in Chinese stock markets, halting new share issues, banning large investors from selling stakes and pushing state-owned stock brokers and companies to buy equities.
The Hong Kong government, by contrast, sat on the sidelines, even as the sell-off on the Shanghai and Shenzhen stock exchanges prompted large falls in Hong Kong-listed shares.
Although Hong Kong pulled off the textbook government rescue of a collapsing stock market in 1997, the government』s top financial official said on Friday he had no intention of intervening this time.
「Whatever happens in other markets will have an impact on Hong Kong, which is a very externally oriented market,」 said John Tsang, financial secretary. 「But we conduct our regulatory practices in a mature and sophisticated way.」
Francis Cheung, head of China and Hong Kong strategy at CLSA, a stock broker, said Hong Kong enjoyed a short-term benefit 「any time China screws up」 because investors were reminded of the former British colony』s far stronger regulatory framework.
However, he added that in the long term Hong Kong』s fortunes as a financial centre would inevitably be tied up with mainland China, not least because the city is in the process of integrating its stock exchange with the Chinese bourses in Shanghai and Shenzhen.
Vincent Chan, head of China research for Credit Suisse in Hong Kong, also argued that any benefits for Hong Kong from China』s woes would be short-lived.
瑞信(Credit Suisse)駐香港的中國研究主管陳昌華(Vincent Chan)也辯稱，香港從中國內地困境中獲得的任何好處都將是暫時的。
He said the wide-ranging Chinese intervention in the stock market made investors nervous about the direction of Beijing』s policy, coming in spite of repeated statements from Chinese officials that they wanted to accelerate the opening-up of the economy and financial services.
Such concerns were likely to be negative for Hong Kong, he said, given that most foreign investors buy Chinese stocks listed in Hong Kong, known as H shares, rather than those listed in Shanghai and Shenzhen, known as A shares.
But although the Chinese and Hong Kong governments are pursuing a long-term goal of economic and financial integration, investors will continue to assess the risks of doing business in the mainland and in Hong Kong differently.
「There』s still a difference in governance and the mechanisms in Shenzhen and Shanghai compared with Hong Kong, and investors understand the risks,」 said Edward Au, an auditor at Deloitte who advises Chinese companies on overseas listings.