HK told to embrace change
Ex-IMF official highlights diversified investors, green and data transitions
Zhu Min, a former deputy managing director of the International Monetary Fund, has urged Hong Kong to proactively adapt to the evolving economic landscape, diversifying its funding sources and exploring green finance and datadriven opportunities.
He made the remarks while discussing the challenges faced by the city during a group interview on the sideline of the Boao Forum for Asia Annual Conference 2024 on Thursday.
Zhu, who is now vice-chairman of the China Center for International Economic Exchanges, emphasized the need for “concrete actions” to affirm Hong Kong’s growth potential.
Despite holding a leading position in the global initial public offering market, Hong Kong has experienced a decline in valuations in recent years. This downturn can be attributed to diminishing liquidity and waning demand, Zhu said.
However, he said it is important to note that most of the funds, including those from Europe and United States, have not exited but rather shifted focus from the stock market to wealth management.
To maintain its competitiveness, Zhu suggested that Hong Kong enhance its capabilities and step up its endeavors to attract potential investors, and diversify its funding sources.
Zhu acknowledged the efforts of Hong Kong Chief Executive John Lee Ka-chiu, who paid visits to several Middle Eastern and Southeastern Asian countries to attract investors. He said that the Middle East is expected to invest billions of dollars in China over the coming decade.
Zhu also urged the international financial center to expand beyond traditional stocks and embrace the profound changes.
He cited the example of green bonds, which have the potential to become a major global financial instrument, offering significant opportunities for growth and sustainability.
Although Hong Kong has a substantial stock market, Zhu observed that the local circulation of bonds remains limited. Therefore, he proposed that Hong Kong position itself as a catalyst for green bonds and enhance the global community’s interest in its bond products.
Pointing out the rising importance of data as a capital asset, Zhu suggested that Hong Kong establish a data trading center to capitalize on this emerging opportunity.
He said that the significance of data capital has been widely recognized, and will eventually eclipse financial capital.
China’s central government issued a document on Dec 19, 2022, detailing measures to build data property, circulation, trading, income distribution and governance systems to facilitate the utilization and exchange of data.
After the Ministry of Finance cleared Chinese-mainland companies to list data as an asset on their balance sheets from this year, data is now “financialized” for use in activities such as mortgaging, securitizing and investing.
The sweeping waves of economic policies unfolding domestically and globally, leading to significant changes and numerous opportunities in financial markets around the world, require Hong Kong to embrace change in practical ways, Zhu said.