Cautious optimism in Hong Kong

Cautious optimism in Hong Kong

The annual Asian Financial Forum (AFF) is one of the most important gatherings of the business leaders of some of the world’s most powerful economies. Deliberations made here have wide effects around the globe – not least in Africa, which is rapidly becoming a major trading partner to Asia. Anver Versi attended the 7th AFF in Hong Kong.

China is now Africa’s most important trade and development partner. Like it or not, the rate of our growth and our prosperity is intricately linked with China and its own economic progress or otherwise. In this context, what happens in China in particular and Asia in general, is of considerable interest to us in Africa.

It was with this in mind that I accepted an invitation to attend the 7th Asian Financial Forum in Hong Kong earlier in the year. The event was organised by the Hong Kong government and the Hong Kong Trade Development Council (HKTDC). It was a huge affair.

Over 2,300 business and finance professionals and senior government officials from around the world attended the event at the giant Hong Kong Convention and Exhibition centre.

The HKTDC is the global marketing arm for Hong Kong-based manufacturers, traders and service providers. Its mission is to create opportunities for Hong Kong companies, especially SMEs, to trade in goods and services worldwide.

It has more than 40 offices worldwide, exploring markets and connecting them with Hong Kong businesses. The conference was also a brilliant opportunity to market Hong Kong itself as the premier business hub in Asia. I was met by Abed Al Aziz Nasser, marketing manager for the HKTDC in Dubai. He looks after the Middle East as well as Africa regions.

He had organised a getting-to-know-you dinner in the heart of the city to orient us to the unique HK style of doing business.

On the surface, it is very informal, not too many ties or suits around but underneath, it is always business, albeit with a healthy appreciation of the good life. The underlying motif seems to be: ‘have fun making money’.

Part of the healthy work-life balance is the appreciation of good food – of which there is no shortage in this city of acknowledged culinary delights. This combination of hard-headed business sense and the pursuit of pleasure in all its forms has made HK the pulsating dynamo around which both the East and the West rotate. It is now attracting greater and greater commercial and financial mass around its nucleus.

This tiny enclave on the southern coast of the gigantic Chinese mainland is one of the most densely populated areas of the world and also one of the richest. It was a British colony for 150 years before reverting to China in 1997 as a Special Administrative Region (SAR), thus becoming a natural bridge, in more ways than one, between Asia and the West.

It is already the world’s ninth-largest trading economy, the second-largest stock market in Asia, the second-largest private equity centre in Asia and the third-largest source of FDI from that continent.

Opening the conference, Jack So, chairman of the HKTDC, said the Asian region had emerged as the world’s economic and financial engine – “which is why ‘Asia, Powering World Growth’ is the theme of our seventh forum”.

He pointed out that 60% of all outward investment from the Chinese mainland passed through HK and that it remains the largest pool of renminbi deposits outside the mainland. The renminbi is now the second-most-used currency in trade finance, having overtaken the euro, and this explains why an increasing number of African banks are now happy to open renminbi accounts.

But there was no collective patting of backs during the subsequent presentations. Instead, one felt there was a sense of caution for what the future might bring. Ironically, there seemed to be a perception that the threat to HK’s dominance as a finance and trade centre would come from the Chinese mainland, from places such as Shanghai. The fear seemed to be that HK might lose its relevance if other centres in China or elsewhere in Asia overtook it.

But in discussions afterwards, I was told that HK business leaders had developed a tradition of looking for problems even if they were not there and trying to ward them off before they happened. “This is part of the HK success story,” Abed informed me. “Be prepared for the worst, but make the most of the present.”

Note of caution
Nevertheless, CY Leung, chief executive of the Hong Kong SAR government, did strike a note of caution. He said that while on the surface 2013 marked a positive turning point for the global economy, “digging a little deeper, a review of 2013 also reveals significant red flags for the year ahead. Although Europe is out of recession, the recovery is uneven across the continent. Over in the US, the Federal Reserve has begun unwinding its massive asset purchase programme, a move which continues to weigh on international market sentiment”.

Nevertheless, he said, “the best illustration of Hong Kong’s connector role in global finance can be seen in the internationalisation of the Chinese currency, the renminbi. Our RMB Real Time Gross Settlement (RTGS) system handles an average daily turnover of around RMB 400bn ($65bn).”

International connectivity, he added, “is undoubtedly a key to achieving a full-fledged global recovery. Hong Kong will continue to make good use of its extraordinary advantage as a Special Administrative Region of China. Being part of China, we offer the advantage of ‘One Country’, and with our own legal, financial and economic systems separate to those of the mainland, we offer the advantage of ‘Two Systems’.”


Rate this article

Author Thumbnail
Written by African Business Magazine

African Business and its award-winning team is widely respected for its editorial excellence. We provide the all important tools enabling you to maintain a critical edge in a continent that is changing the world. Our special reports profile a wide range of sectors and industries including Energy, Oil and Gas, Aviation, Agriculture to name but a few.

Join our mailing list to receive a sharp, curated weekly round-up of African business news.

Help us deliver better content

Related Posts

Join our 70,000+ subscribers by signing up to our mailing list

Help us deliver better content