How Beijing Took Control of Hong Kong’s Financial Hub—and Left the West Behind By Rebecca Feng
The head of investment banking at a Wall Street bank, who is from a Western country, said he felt alienated in Hong Kong now, with so much Mandarin spoken and so much competition from Chinese banks. “It’s still a world-class city,” he said. “But I don’t think we can call it a world city anymore.” Nonsense, say Chinese executives, many of whom prefer Chinese banks, which they say treat them better, charge less, and have wider networks in mainland China, though their presence elsewhere is small. Hong Kong is still vital for anyone in China who wants to issue or invest in stocks and bonds outside the mainland—they just don’t need Western bankers to be the gatekeepers, they say. So far this year, 56 companies have listed on the Hong Kong stock exchange, and 79% of those didn’t engage any foreign bank as major sponsors, according to deal prospectuses. That number was around 50% in 2022 and 2021, according to documents compiled by financial data provider Wind. In 2022, mainland Chinese companies with regional headquarters in Hong Kong outnumbered American ones for the first time in at least three decades, official figures show. The gap widened in 2023. Mainland Chinese companies have also solidified their dominating position in Hong Kong’s stock market, taking up 80% of the market’s total value by the end of October, compared with 60% a decade ago.
Source: The Wall Street Journal