Hong Kong faces the danger of being marginalized as a global financial center due to uncertainties stemming from the current political environment in the city, said Joseph Yam Chi-kwong, former chief of the Hong Kong Monetary Authority.
“Hong Kong has arrived at a critical point where its status as a global financial center could be marginalized given the complex environment and ongoing political tensions,” Yam said in a speech Friday, according to RTHK.
While Hong Kong has been the springboard for offshore renminbi business development, other cities such as London and New York could also be used by Beijing to further its goals, he said.
In addition, the upcoming Hong Kong-Shanghai stock connect could be copied to other markets if things go smoothly with the current program. That could mean other overseas markets having bigger scale can lure more transactions, Yam added.
Hong Kong still has many advantages since the mainland financial market is not truly open yet. However, the city has a population of just 7 million, and its GDP now is less than ten percent of that of mainland, compared with about 20 percent in the past, he pointed out.
Hong Kong has to prove its “stability”, and demonstrate that market transactions won’t be affected by movements such as Occupy Central, Yam said.
If Beijing develops doubts about the reliability of Hong Kong as a capital transaction hub, it might consider other alternatives, he warned.
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