Hong Kong's future as Asia's financial centre | FT Film
Short Summary:
This FT Film explores Hong Kong's future as Asia's leading financial center amidst political turmoil, the COVID-19 pandemic, and increasing influence from mainland China. The film discusses the challenges posed by the 2019 protests, the National Security Law, and Hong Kong's zero-COVID policy, leading to a brain drain and raising questions about its competitiveness against other Asian financial hubs like Singapore, Tokyo, and Shanghai. While Hong Kong retains its crucial role as a gateway to Chinese capital, its future hinges on its ability to balance its economic ties with China and the need to maintain international standards of rule of law and freedom. The film highlights the difficult choice facing international businesses: adapt to China's rules or leave.
Detailed Summary:
The film is structured around the central question of Hong Kong's continued viability as Asia's premier financial center. It breaks down into several key sections:
Section 1: Hong Kong's Current Status and Challenges: The film begins by establishing Hong Kong's traditional position as a top-three global financial center alongside New York and London, emphasizing its role as the gateway between China and the rest of the world. However, it immediately highlights the significant challenges: political unrest stemming from the 2019 protests, the implementation of the National Security Law, and the impact of Hong Kong's strict zero-COVID policy. These factors are presented as creating uncertainty for both local residents and international investors. The film emphasizes the importance of China's need for capital as a key determinant of Hong Kong's future success.
Section 2: The Impact of the 2019 Protests and National Security Law: This section details the events of 2019, focusing on the proposed extradition bill and the subsequent widespread protests. The film explains how the Chinese government's response, including the introduction of the National Security Law, has significantly impacted freedom of speech and assembly, leading to arrests and exiles of pro-democracy activists. The impact on the financial sector is presented as nuanced: while some argue the law brought certainty, others highlight concerns about its enforcement and the erosion of the rule of law, impacting investor confidence. A key quote highlights this tension: "It's hard to understand how it will be enforced and how someone could be on the hook as a result of the national security law."
Section 3: The Zero-COVID Policy and Brain Drain: The film discusses the devastating impact of Hong Kong's zero-COVID policy, leading to strict social distancing rules, quarantines, and flight bans. This isolationist approach is presented as contributing to a significant "brain drain," with many Hong Kongers and expats relocating to other cities like Singapore, Tokyo, or the UK. This exodus further undermines Hong Kong's position as a desirable place to live and work.
Section 4: Alternative Asian Financial Centers: The film compares Hong Kong to potential rivals: Singapore, Tokyo, and Shanghai. While Singapore is presented as a viable alternative, it lacks Hong Kong's deep connection to China's capital markets. Tokyo, despite its large economy, is deemed less attractive due to its risk-averse culture and stronger ties to North America and Europe. Shanghai, while possessing a larger financial market, is constrained by China's closed market and lack of the same international infrastructure as Hong Kong.
Section 5: Hong Kong's Future and China's Influence: The film concludes by acknowledging Hong Kong's continued importance as a financial center, particularly as a conduit for Chinese companies to access international capital. However, it emphasizes the increasing control exerted by Beijing, stating that Hong Kong is becoming a "China-focused financial center" operating on Chinese terms. The film presents a stark choice for international businesses: comply with China's rules or leave. A government official's quote summarizes this shift: "China really just wants to shut that window of foreign influence in Hong Kong." Despite the challenges, the film suggests that Hong Kong's resilience and the continued need for financial services in China will ensure its continued role, albeit a diminished one, as a major Asian financial hub.