Hong Kong has been seizing every opportunity to consolidate its role as a global financial centre, leveraging unique advantages and national strategies. In the first piece of our miniseries focusing on the city’s financial industry ahead of the handover anniversary, we examine what Shanghai’s rapid development of offshore markets means to Hong Kong.
Beijing’s latest push to strengthen Shanghai’s offshore financial capabilities is prompting fresh questions about whether Hong Kong’s long-standing dominance in the sector could eventually come under pressure.
For many analysts, it is not any single policy measure that stands out, but rather the speed of Shanghai’s ambitions, the determination of local officials and, most importantly, Beijing’s explicit commitment to support the city in “taking the lead in building an offshore financial business system”.
The message was underscored at this month’s Lujiazui Forum, where People’s Bank of China Governor Pan Gongsheng unveiled a pilot foreign-exchange trading programme in Shanghai’s free-trade zone.
Foreign-exchange trading is only one component of a broader blueprint. The newly released Action Plan for the Development of Offshore Finance in Shanghai International Financial Centre also covers free-trade-zone offshore bonds, offshore trade financing, international treasury centres and other cross-border financial services.