Financial Services

Hong Kong Offers Unrivalled Opportunities in the Financial Sector

Hong Kong is the ideal gateway for foreign firms seeking access to the Mainland, and for mainland enterprises going global. Renowned for its free flow of information and capital, advanced financial infrastructure and effective regulatory regime, Hong Kong has attracted a rich pool of professional talent and financial expertise. In addition, Hong Kong’s position as a major asset management, capital formation, banking and insurance hub is supported by a business-friendly environment, low taxation and a trusted legal system.

In fact, Hong Kong overtakes the United States and the United Kingdom to top the World Economic Forum’s annual Financial Development Report released in December 2011. As the first Asian financial centre to achieve this rank, Hong Kong’s position was bolstered by strong scores in non-banking financial services such as IPO activity and insurance.

The financial service industry is one of Hong Kong’s four pillar industries, which employed 208,900 people in 2010, or 6% of the city’s entire workforce. This figures rose to 224,800 or 6.2% in Q2 2011. In the banking sector, Hong Kong is one of the largest banking centres in the world with 73 of the world’s top 100 banks being established a presence here.

Hong Kong’s Role as an Offshore RMB Centre

The burgeoning renminbi (RMB) business is another bright spot in Hong Kong’s financial services industry. Hong Kong has developed into the most comprehensive and competitive platform for offshore RMB business. In 2011, renminbi trade settlement handled by banks in Hong Kong amounted to RMB1,915 billion yuan, accounting for 92% of the total amount of Mainland China’s external trade settled during that period (RMB2,081 billion yuan). This reflects Hong Kong’s role as the global hub for renminbi trade settlement, serving both local and overseas banks and companies. Apart from providing a full range of RMB banking services including trade settlement and financing, Hong Kong has the largest pool of offshore RMB liquidity, and has become the global hub for RMB dim-sum bonds with issuance totaling RMB108 billion yuan in 2011.

Sustained Growth in the Fund Management Sector

Hong Kong’s fund management business is not only highly internationalised, but also boasts the highest assets under management in Asia (excluding Oceania), ahead of both Japan and Singapore. According to the latest survey issued by Securities and Futures Commission (SFC), asset management business in Hong Kong recorded a year-on-year 17.5% increase in total assets under management (AUM) to over HK$6,841 billion in 2010.

At the same time, Hong Kong’s hedge fund industry remained robust. As the latest survey from SFC indicated that the total hedge fund AUM in Hong Kong increased from US$9.1 billion in 2004 to US$63.2 billion in 2010.

InvestHK’s Financial Services team can offer practical support to companies wishing to set up in Hong Kong. Contact us for more information.

Fast Facts

• Hong Kong ranked third in the Global Financial Centres Index (GFCI) by the City of London released in September 2011
• Hong Kong topped the Financial Development Index by the World Economic Forum’s 2011 Financial Development Report, the first Asian financial centre to achieve this rank
• Global hub of offshore RMB financing with offshore renminbi deposits reaching nearly RMB600 billion yuan at the end of 2011