Half of business executives in mainland China and Hong Kong (50%) believe that Hong Kong will be overtaken as Asia’s leading financial hub, according to a new survey by London Business School in partnership with University of Hong Kong. Singapore is seen as Hong Kong’s biggest rival (53%), followed by Shanghai (38%). Of the group that is pessimistic about Hong Kong’s future, 40% believe that the city will be overtaken in the next six to ten years.
Linda Yueh, Adjunct Professor of Economics, London Business School, said: “Respondents see the challenge coming from Singapore and Shanghai as competing international financial centres. Singapore, in particular, has the governance and institutions that have propelled Hong Kong to a top position in the region. With governmental support behind Shanghai, it too continues to rise as a competitor.”
While mainland China’s economy continues to grow, just over half (52%) of executives surveyed believe that the impact on Hong Kong’s competitiveness will be positive. However, there is debate as to whether the effect will be dependent on where growth in China is concentrated, and on the Hong Kong government’s willingness to adopt policies that align with the rise of China. More than half (57%) of respondents consider that mainland China’s political influence will have the greatest effect on Hong Kong’s competitiveness, while a third (33%) consider mainland China’s financial influence to be the leading factor.
More than four fifths of executives (81%) view financial services as Hong Kong’s most competitive industry. However, almost three quarters of respondents (72%) are worried about its lagging technology sector, which Linda Yueh believes may hamper Hong Kong’s ability to be competitive in fintech and other fast-growing areas.
“The survey has exposed areas, notably tech, which requires reform to keep Hong Kong competitive,” Yueh says, “With more investment in the financial infrastructure to support fintech and the start-up sector, as well as strengthening regulation to keep Hong Kong competitive and a desirable place to live, those odds may well tilt in Hong Kong’s favour.”
More than 200 members of London Business School and University of Hong Kong’s communities participated in the survey on the future of Hong Kong’s economy, including alumni, Executive Education past participants, EMBA Global-Asia students, London Business School’s China Club and Global Masters in Management students.