Hong Kong should expand its business beyond equities if it is to remain a significant financial centre, according to Charles Li, CEO of Hong Kong Exchanges and Clearing (HKEx). He believes that more effort must be made in fixed income, currencies and commodities trading.
He said Hong Kong’s financial industry is not yet at a point of sufficient development whereby it can attract Chinese capital that is leaving the mainland. Li was speaking this week at the Asian Financial Forum in Hong Kong.
He added that as China continues to open up its financial system, investors will require greater sophistication of instruments in which to hedge risk and exposure. Nevertheless, he believes that the window of opportunity may be fleeting, as if and when mainland markets/exchanges develop similar levels of sophistication, then business in those types of products will migrate from Hong Kong to those centres.
He told the audience. “Economically, mainland China and Hong Kong will be one country, one system by 2020,” (which is at odds with the 50-year transition period laid down as part of the terms of the 1997 Hong Kong handover). Off the microphone, he later asked that people do not make too much of that remark.