Hong Kong maintained its fourth-place ranking among the world's 120 financial centers, as it did six months ago, with New York, London, and Singapore still occupying the top three spots. Various factors threaten Hong Kong's ability to retain its status as an international financial center. TM Chan/The Epoch Times
According to the latest Global Financial Centre Index (GFCI) report jointly compiled by UK-based think tank Z/Yen and the China (Shenzhen) Institute of Comprehensive Development, Hong Kong ranks fourth out of 120 financial centers worldwide, as it did six months ago, with New York, London, and Singapore still in the top three.
Although Hong Kong’s ranking remains unchanged, the latest report evaluates 114 financial centers according to their fintech output. As a result, Singapore and Washington are replacing Beijing and Hong Kong in the top ten fintech hubs.
However, the foreign media and some commentators are not optimistic about Hong Kong’s prospects of maintaining its status as an international financial center.
The GFCI report has been released bi-annually since 2007, in March and September. The report utilizes 153 quantitative indicators from various sources, including the World Bank, the Economist Intelligence Unit, the Organization for Economic Cooperation and Development, and the United Nations.
According to the report, Hong Kong has consistently held the third position in the rankings since 2007, but the gap between Hong Kong and both Singapore and San Francisco has been shrinking. In the 2022 rankings, Singapore surpassed Hong Kong to take third place, while San Francisco closely trailed behind, with only one point separating it from Hong Kong.
Regarding overall competitiveness, New York topped the list with 760 marks, while London scored 731 marks, remaining unchanged from the last report six months ago. However, Singapore and Hong Kong, ranked third and fourth, both dropped three points from last time, scoring 726 and 725, respectively.
Hong Kong has been in the third position in the global financial center for most of the calendar year. However, Singapore replaced it in the third position from 2022 onwards, with San Francisco gaining momentum and only one point below Hong Kong this year. GFCI report
According to Z/Yen Chairman Michael Mainelli, London has maintained its position as a top financial center, despite the uncertainty caused by Brexit and other political factors. This demonstrates London’s strength in the finance industry.
According to the GFCI report, Hong Kong’s “human capital” ranking has dropped from 8th to 11th place. In contrast, its rankings in the other four competitiveness indicators have all increased by two places compared to the previous report. Hong Kong’s latest ranking in the “business environment” is category six, it is fourth in “infrastructure,” fifth in “financial sector development,” and seventh in “reputation.”
The report includes sub-indices for various industries such as banking, investment management, insurance, professional services, government, regulatory, finance, fintech, and trading. These sub-indices are calculated based on interviews with industry professionals. New York and London ranked first and second, respectively, in all areas, while Hong Kong ranked in the top five in several areas but ranked sixth for investment management and eighth for trading.
Hong Kong Falls Out of Top Ten Fintech Hubs
According to the latest report, Hong Kong’s financial technology center score has decreased by seven points compared to the previous information. As a result, its ranking has dropped by four places, falling out of the world’s e top ten financial technology centers. On the other hand, Singapore’s score has increased by seven points, and its ranking has risen four places to become the ninth-best financial technology center in the world.
The top five fintech hubs, in order, are New York, San Francisco, London, Shenzhen, and Los Angeles.
According to the respondents, the two most crucial factors in creating a competitive environment for fintech providers are access to finance and information and communications technology infrastructure.
On March 23, in response to the GFCI report, the Hong Kong government stated that Hong Kong’s ranking in the areas of the business environment, infrastructure, financial sector development, reputation, and overall total score have all increased by two places compared to the previous report, which fully reflects Hong Kong’s strengths and advantages as a leading global financial center. The government also emphasized that, in the face of fierce international competition, Hong Kong will adopt a more proactive development model to promote system optimization and policy innovation, increase publicity and promotion to consolidate its advantages, and continue to enhance its competitiveness as a global financial center.
Reports Mention that Hong Kong Faces Obstacles
Recent reports have highlighted that despite the gradual return to normalcy in Hong Kong, there are still concerns regarding its status as an international financial center. Several reports have pointed out that Hong Kong needs to address various issues to regain its former position. These issues include economic pressure from mainland China, waves of emigration, and other challenges faced in recent years. Additionally, reports have noted the underperformance of Hong Kong’s stock and real estate markets, impacting its position as a global financial center.
Some political figures have expressed pessimism about the future of Hong Kong. They called for the U.S. government to impose sanctions on mainland China for its crackdown on Hong Kong dissidents. They also suggested revoking Hong Kong’s independent voting status in several international organizations. If Hong Kong loses these statuses, it could significantly impact its role as a financial center.
Ranked Sixth After the Anti-Extradition Law Amendment Bill Movement
According to the March 2020 report of the Global Financial Centre Index, Hong Kong’s ranking dropped to sixth place globally due to the impact of the Anti-Extradition Law Amendment Bill protest. The Hong Kong government acknowledged that the drop in ranking was due to the social events in 2019, which brought unprecedented challenges to Hong Kong. However, the ranking later rose to third place. In the latest report published in September 2022, Hong Kong has dropped to fourth place after being overtaken by Singapore.
Nie Law is a contributor to The Epoch Times with a focus on Hong Kong-related topics.
