Shenzhen and Qianhai: Threat or Opportunity for Hong Kong
8:00am Registration/ Continental Breakfast included 8:15am Speech 9:30am Close
Hosted by the China Business Committee and Financial Services Committee
Shenzhen, China, aspires to be an international financial center, but it mainly operates in China's financial networks. Hong Kong is the Asia-Pacific center of financial networks. Although Shenzhen is only 50 kilometers from Hong Kong, it might as well be situated far away in mainland China. Beijing maintains tight controls on China's capital account; therefore, the political border constitutes an almost impermeable barrier to capital flows. This determines that Shenzhen's financiers primarily operate in China's networks, headed at the regulatory and policy level in Beijing and at the business level in Shanghai, the country's premier financial center.
Only after China opens its capital accounts to free mobility of capital, inbound and outbound, will Shenzhen and the new Qianhai zone be able to operate as a financial center in Asia-Pacific and in larger global networks. Nonetheless, this opening may have only modest impact on the relative importance of Shenzhen/Qianhai in wider financial networks outside China.
Hong Kong's financial firms have little incentive to shift senior decision-makers across the border. Quite the contrary. Those who relocate would place themselves outside of networks that encompass both exchanges of sophisticated information/knowledge about Asia-Pacific and global finance and the collaborative opportunities in finance.
Recent evidence of financial transactions and organizational restructuring, however, suggest that mainland Chinese financial institutions are in the process of re-evaluating how they engage with business in Shenzhen and its Qianhai financial zone. Likewise, signals are emerging that Hong Kong financial firms, both domestic and regional headquarters of foreign institutions, are making tentative moves towards establishing frameworks for financial business in Shenzhen/Qianhai. These signals raise the question whether tentative moves by external financial firms to expand their financial engagement with Shenzhen/Qianhai threaten Hong Kong's dominance of financial relations with China.
Table bookings (10-12 persons) are welcome!
American Club, The 49/F 48-49/F Two Exchange Square 8 Connaught Place Central, Hong Kong