Amid ever-changing global geopolitical and economic dynamics, Hong Kong’s position as a business hub remains solid, thanks to its robust regulatory framework and financial infrastructure. This was the message that K C Chan, Chairman of WeLab Bank, shared during the latest talk in the Chamber’s “CEO 123 Tell Me More” series on 8 May.

Speaking to a full house, the former Secretary for Financial Services and the Treasury acknowledged that Hong Kong was facing numerous challenges such as Sino-US tensions, leading regulators to take a proactive approach in introducing new initiatives. These include the easing of eligibility criteria for the ETF (exchange-traded fund) Connect Scheme, recently announced by the China Securities Regulatory Commission as part of five measures to revive confidence in Mainland capital markets.

In the past few years, questions have been raised about Hong Kong’s standing as an international financial centre, with IPO volume plunging to a 10-year low last year. Despite this, Chan argued that Hong Kong remained irreplaceable given its sound regulatory regime, well-established legal system as well as high integration into the global economy. 

“A financial centre is not ranked merely by IPO,” emphasized Chan, adding that these activities did not dominate the financial market. He pointed out that, while London’s financial market was very strong, its IPO volume was not very high.

Meanwhile, rapid economic growth in Asia has been a silver lining for Hong Kong. “Growth in countries like Indonesia, India and others will generate a lot of wealth in this region, which means the conditions for asset and wealth management business will be in place,” he explained. “The money will look for places where it can be managed in a diversified way. As such, Hong Kong is in a very good position as we will be managing some portion of these funds.” 

With an eye on the future, Chan said Hong Kong should seek to reposition itself as an asset management centre for China and Asia. For example, more needs to be done to attract family offices, capital and talent from overseas, which would better equip the city to manage assets and seize opportunities. Chan said he would also like to see a further broadening of the ETF Connect Scheme to include global stock index funds, which would cater to the strong demand of Mainland investors for equity products.