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Friday, Jun 21, 2024

Friday Beyond Spotlights – Joseph Chan: The Fintech Capital

Friday Beyond Spotlights is an informative yet light-hearted talk show airing every Friday at 8:30pm on Hong Kong International Business Channel (#76). The English language program features the most prominent guests who share their insights into current affairs, business, innovation and culture, as well as their ingenuity, passion and grit which forge their Lion Rock Spirit. The show is hosted by businessman and philanthropist Patrick Tsang On-yip, lawyer and lawmaker Nick Chan Hiu-fung, and seasoned business maverick Herman Hu Shao-ming.

Hosted by Nick Chan, episode 15 of Season 2 presents Joseph Chan Ho-lim, the Under Secretary for Financial Services and the Treasury of the Hong Kong SAR. Hong Kong has long been globally recognised as one of the world’s leading international financial centres. According to Chan, in the equity market Hong Kong raised over HK$100 billion through IPOs in 2022, ranking 4th in the world; in the bond market it ranks No.1 for six consecutive years as the largest arranging centre for international bond (issuance) in Asia; and in risk management it ranks No.2 in the world and No.1 in Asia in terms of both insurance density and insurance penetration. The latest report also shows that the city’s AUM (assets under management) reached US$4.6 trillion at the end of 2021, making it the largest centre by AUM of the asset and wealth management business, up 48 per cent during 2019-2021.

“If you look at the cross-border wealth management business, Hong Kong ranks No.2 in the world and No.1 in Asia; and the same industry report forecasts that Hong Kong would overtake Switzerland as No.1 within the next few years,” adds Chan, “And as China’s international financial centre, Hong Kong is the biggest offshore renminbi centre. We have around RMB 1 trillion in our liquidity pool in offshore renminbi, and also we handle around 75 per cent of offshore renminbi global payments, making us the world’s largest offshore renminbi centre.”

According to Chan, the fact that Hong Kong is already Asia’s leading international financial centre puts the city in an excellent position to become the FinTech capital of the Asia-Pacific region. Currently, there are over 800 FinTech companies in Hong Kong, having grown by about 60 per cent over the past few years. These include eight licensed virtual banks and four licensed virtual insurers. “For FinTech companies, as they develop, they would be looking for access to investors, potential customers, and potential business partners; and Hong Kong provides them tremendous access because most multinational financial institutions have set up their Asian regional headquarters or major offices in the city.”

Chan says Hong Kong is the perfect place for FinTech companies to grow because many FinTech companies from Mainland China have set up their offices in Hong Kong to attract foreign investment and also use Hong Kong as a springboard to develop their overseas business; and on the other hand, many FinTech companies from Europe or Americas use the city as the hub to develop business in Asia, especially for attracting funds from Mainland China and entering the Mainland market. And for FinTech startups, Hong Kong is also an ideal place to develop because it is the second largest private equity hub (after Mainland China) in Asia, hence is the best place to get access to private equity with a free flow of capital regime.

“The uniqueness and the strength of Hong Kong as a leading international financial centre is the ‘One Country, Two Systems’. Under ‘One Country’, we offer preferential access to the Mainland China market, which is the second largest economy in the world and is still growing very strongly. And under ‘Two Systems’, in Hong Kong we offer free flow of capital and information, a Common Law system, a simple and low tax regime, and also a regulatory framework which is compatible with those of the global major markets,” says Chan.

In the program, Chan shows audiences an ABRSM (Associated Board of the Royal Schools of Music) Grade 8 Piano Certificate as the item which symbolizes his can-do Lion Rock Spirit. When Chan was a boy, he told his parents that he liked music and wanted to learn piano. Coming from a grassroot background, his family could not afford but a few years later managed to save enough money to buy him a piano. He started learning piano at the age of 10, but was not able to complete the Grade 8 exam before he left for his study at the University of Michigan. During his first-year study in the US, Chan struggled to continue practicing piano despites all the challenges, and eventually managed to pass the exam when he returned to Hong Kong during the summer break in 1996. To Chan, this certificate represents the persistent efforts he has made to overcome the challenges not only to complete his incomplete childhood dream, but also to pay back the sacrifices made by his parents in fulfilling his dream. “I reckon that as long as you are determined to do something, no matter how difficult and challenging the environment is, you can be creative and find a way to get it done with your perseverance. I would call this the can-do spirit.”

Chan believes as an international financial centre, Hong Kong will continue to prosper. “I think the best is yet to come and there are a lot of opportunities coming along. Hong Kong will always serve as a conduit to connect the foreign investors and foreign companies to the Mainland market, and will continue to play a crucial role to facilitate the flow of funds.”

To watch the video, visit Friday Everyday YouTube Channel – Friday Beyond Spotlights Season 2 Episode 15 l Joseph Chan

Episode 15: https://youtu.be/GY8YKN5J8sg


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