POSTED 19 Aug 2019 - 11:08

Can the Pearl of the Orient retain its shine?

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Will the social unrest in Hong Kong affect its status as a financial centre?

Top Response

Dora Hoan, Group CEO, Best World International Ltd

The civil unrest in Hong Kong is temporary, without long-lasting economic loss. Over the past 20 years, Hong Kong has demonstrated its tremendous ability to overcome social instabilities, as seen during the Asian financial crisis in the late 1990s, the SARS panic in 2003, the Umbrella Movement...


Johnson Chng, Managing Partner (Asia), QVARTZ
19 Aug 2019 - 11:30

I see the long-term impact as follows: Hong Kong's competitive position will be significantly affected negatively, with business confidence of both international and Chinese companies eroded. Beijing will move more of its state-owned enterprises' overseas operations elsewhere, with Singapore a likely beneficiary. Likewise talents from China will shift from Hong Kong, perhaps to places like Singapore

Aggravating the situation, the world economy is fragile at this juncture, with most of the Western economies going through a rough patch themselves, which raise the need for MNCs to pull back from Asia, including Hong Kong.

At the end of the day, the West will know that China will not give in or give up Hong Kong. The crisis in Hong Kong will not be quickly or easily resolved.Thus the Oriental Pearl is losing its shine and brilliance, which will probably be difficult to recover anytime soon.

Dora Hoan, Group CEO, Best World International Ltd
19 Aug 2019 - 11:29

The civil unrest in Hong Kong is temporary, without long-lasting economic loss. Over the past 20 years, Hong Kong has demonstrated its tremendous ability to overcome social instabilities, as seen during the Asian financial crisis in the late 1990s, the SARS panic in 2003, the Umbrella Movement more recently, etc.

On the long-term negative impact on its status as a financial centre, the primary concerns are China's move to restore order and how far it will go to ensure Hong Kong remains under its influence.

However, turning Hong Kong into a burden is never in the interests of China. In fact, Hong Kong is part of China's economic strategy; it is in China's interests to safeguard Hong Kong's autonomy, especially its economic strengths. Many big Chinese enterprises have listed and set up offices in Hong Kong, and conducted foreign direct investment through Hong Kong.

Indeed, many entrepreneurs from around the world are among the beneficiaries of Hong Kong's open market and independent legal system. Thus, maintaining diplomatic relations with other countries is another concern that will hold back any extreme actions against Hong Kong.

In short, the civil unrest will have a direct impact on retail and tourist businesses in Hong Kong for a short term, but Hong Kong will retain its status as a financial centre with its own ability to resolve social crises, and with China's reluctance to undermine its institutional advantages to protect their own interests.

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David Leong Managing, Director, PeopleWorldwide Consulting Pte Ltd.
19 Aug 2019 - 11:29

Hong Kong's vibrancy as a financial centre premises on its clear rule of law, transparency with active participants and stakeholders willing to transact through its exchanges. The velocity, volume and value of trades are high because of the trust built into the financial system.

Today, the social unrest in Hong Kong is unprecedented. The violence does not seem to be abating and has instead escalated with each week because there is no standdown by either side - the free-forming protester groups and the government.

When the all-important trust has vaporised because of the loss of stability with this social unrest, Hong Kong may take a long time to re-stack the trust blocks to the same high point. The whole structure of trust is demolished with the deteriorating investor confidence.

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Henry Tan, Group CEO, Nexia TS Group
19 Aug 2019 - 11:29

Income inequality and people without a unique identity. These two factors sum up the main reasons behind the social unrest. Whether in the long run the unrest will have a bigger impact depends on how the government deals with these fundamental issues.

They are not easy and if not handled properly, investors and visitors will stay away from Hong Kong as there are many other choices. To try to deal with the first issue, massive middle-income housing akin to Singapore's HDB needs to be implemented with a promise that young people will be able to own homes.

The second issue is difficult but if China can extend the 50-year ''one-country-two-systems'' promise, it may help the ground sentiments, and ways can be looked at how Hong Kong residents can be better integrated into China.

Toby Koh, Group MD, Ademco Security Group
19 Aug 2019 - 11:28

The crisis is undoubtedly a big blow to Hong Kong's status as one of the financial hubs of the world. The sustained protests, violence and the inability to find a compromise is a matter of grave concern.

There does not seem to be a viable solution between China's interests and the wishes of the Hong Kong people. These two months have ignited a fire in the protesters who now believe there is enough support and enough numbers to continue their guerrilla tactics for months to come.

Upon reflection, I am thankful that Singaporeans have it way better. Sovereignty and the Singapore way of life are to be treasured and defended at all cost.

Lim Soon Hock, Managing Director, PLAN-B ICAG Pte Ltd
19 Aug 2019 - 11:28

Hong Kong's success was due to China, as her hinterland. Hong Kong will continue to depend on China for her future. Whether Hong Kong can continue to thrive, including being a financial centre, would depend on whether China would want to deliberately intervene to restore law and order. The worse case is China will do nothing so as to let Hong Kong descend into an abyss.

When that happens, it cannot be entirely the fault or doings of China but must be that of the protesters, especially the idealistic ones from the younger generation. They can protest or demonstrate but cannot break the law and shoot themselves in the feet.

They will be killing the goose that lays the golden eggs.

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Helen Ng, Chief Executive Officer, Lock+Store
19 Aug 2019 - 11:28

The protests in Hong Kong have brought trade to a standstill. People are afraid to venture out of their homes and most shops remain shuttered. Our four facilities have seen virtually no new walk-in customers over the past month.

Should the protests persist the economy will be severely destabilised. Foreign investors' sentiment will remain dampened as long as a lasting solution to the conflict is not found.

Maren Schweitzer, Director, Schweizer World Pte Ltd
19 Aug 2019 - 11:27

Hong Kong's deepening political crisis now risks becoming an economic one. The unrest in Hong Kong has the potential to accelerate the downward spiral that has started some years ago already.

Talent drain is among the highest risk factors.

From our business perspective, a Global Financial Centre (GFC)'s attractiveness lies in its transparent and sound legal framework complementing its economic and political stability and the calibre and competences of its workforce. Foggy Old London might not be a choice as an alternative anymore, thus Singapore is one. Singapore has deep capital markets and is a leading insurance and wealth management marketplace. It has a disciplined and efficient workforce.

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