Hong Kong’s drive for suc­cess is not in ques­tion

China Daily (Canada) - - FRONT PAGE - By XIE YU in Hong Kong

My main­land friends and I of­ten en­gage in in­tense de­bate about whether or notHong Kong has al­ready be­come marginal­ized fi­nan­cially.

“TheHong Kong peo­ple are liv­ing an old dream,” one friend said with a sigh last week. “They are be­ing left be­hind by the In­ter­net tide— they don’t even use Taobao.”

Another lamented: “Their mind­set is lag­ging be­hind. How­many young peo­ple know about O2O (online to off­line busi­ness model), or P2P (peer-to-peer lend­ing through In­ter­net), or crowd fund­ing?

“Main­land young­sters are con­stantly fight­ing against the clock to build the next ma­jor busi­ness em­pire; but young peo­ple in­Hong Kong are still so ob­sessed with com­plain­ing.”

Strong opin­ions, shared by some oth­ers cer­tainly. But I’ve got a more gen­er­ous viewof the city since I ar­rived here last sum­mer.

What I still see here is a vi­brant young busi­ness com­mu­nity, de­spite what can some­times be a non­cha­lant out­ward ap­pear­ance, which is still driv­ing on, pow­ered by a very mod­ern in­fra­struc­ture, and busi­ness ethic.

Talk in the press aboutHong Kong hav­ing “had its day fi­nan­cially” are inmy opin­ion grossly pre­ma­ture.

And the city’s still go-get­ting at­ti­tude is no bet­ter il­lus­trated than at theHong Kong Stock Ex­change.

Forty-six com­pa­nies have tapped theHong Kong mar­ket to raise funds in the first six months of this year, gen­er­at­ing pro­ceeds of more than HK$127.5 bil­lion ($16.5 bil­lion), a 57 per­cent rise, ac­cord­ing the latest data from Deloitte.

An­a­lysts now fully ex­pec­tHong Kong to re­claim its place as this year’s IPO cham­pion, out­pac­ing its tra­di­tional ri­vals, NewYork and Lon­don.

These re­sults are strength­ened fur­ther by the fact that the three big­gest IPOs in­Hong Kong this year to-date were by main­land­based com­pa­nies, in­clud­ing siz­able bro­ker­age com­pa­nies like GF Se­cu­ri­ties andHu­atai Se­cu­ri­ties, as well as the par­ent com­pany of the world’s big­gest com­puter man­u­fac­turer, Le­gendHold­ings.

This is an eye-catch­ing re­sult, es­pe­cially given the main­land author­i­ties have been speed­ing up their ap­proval of newlist­ings, and the his­tor­i­cally high val­u­a­tions be­ing of­fered for IPOs in Shang­hai and Shen­zhen, pushed up by the frothy bull eq­uity mar­ket.

Why are so many com­pa­nies still in­ter­ested in aHong Kong list­ing?

“A ma­jor rea­son is theHong Kong mar­ket is more trans­par­ent and ac­ces­si­ble,” an in­vest­ment banker friend told me. “As long as you are qual­i­fied and fol­low the rules, you will get the ap­proval. But in the main­land, it still costs you too much time and energy to fig­ure ev­ery­thing out, and that’s even if you can find any­one to tell you.”

It cur­rently takes just four to six months to get listed on the HKEx, from ap­pli­ca­tion to list­ing, while in the main­land, the process can stretch out to sev­eral years.

As a fi­nan­cial re­porter op­er­at­ing in­Hong Kong, I have found this greater ease of get­ting things done formy­self.

Find­ing in­for­ma­tion here, or hav­ing things ex­plained, is so much eas­ier than in the main­land.

TheHong Kong Stock Ex­change’s slick media op­er­a­tion ac­tively con­tacts re­porters to ex­plain any reg­u­la­tion change or break­ing event.

If you have any un­cer­tain­ties you can call them, and very likely they will an­swer your ques­tion.

In the main­land, how­ever, for all but a few­ex­pe­ri­enced re­porters, it is very hard to reach the spokesper­son of most gov­ern­ment or­gans, and cer­tainly the bourses in Shang­hai and Shen­zhen.

I have tried con­tact­ing the media of­fices in Shen­zhen by phone, text mes­sage, and email.

If any­one picks up the phone, they are in­vari­ably too busy to talk and hang up im­me­di­ately. Mes­sages are rarely an­swered.

Ev­ery­one who has lived or worked in the main­land knows the im­por­tance of “guanxi” (per­sonal con­tacts, con­nec­tions, re­la­tion­ships in the net­works of in­flu­ence). Es­sen­tially, as a re­porter it’s a tough task to find the facts you need with­out talk­ing to the right per­son.

Things have started im­prov­ing, as the gov­ern­ment strength­ens its fight against power abuse.

On Satur­day, for in­stance, China’s stock mar­ket reg­u­la­tory body, the China Se­cu­ri­ties Reg­u­la­tory Com­mis­sion, an­nounced vi­aWeibo that it had fired a top of­fi­cial in its stock is­suance su­per­vi­sion depart­ment af­ter dis­cov­er­ing that her hus­band had been in­volved in illegal trad­ing.

But there is still much room for im­prove­ment.

The main­land may well con­tinue to of­fer con­sid­er­ably more new busi­ness ideas and en­joy a con­tin­ual stream of in­no­va­tive newtech­nolo­gies.

But it re­mains a big ques­tion whether the bright­est prospects will stay at home for com­pa­nies to raise the cash they need to ex­pand, or look toHong Kong for funds. Con­tact the writer at xieyu@chi­nadaily.com.cn

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