Hong Kong’s Clout as a Global Financial Center Clouded by Uncertainty

https://www.wsj.com/articles/hong-kongs-clout-as-a-global-financial-center-clouded-by-uncertainty-11560504645

111 88 7 years ago

duxup• 7 years ago

I can't read the article due to a paywall and I'm sure folks will move money around ... but I'm not sure anything else happens.

Companies had no problems paying the price of tech transfer and etc in China, hard to imagine "China light" in Hong Knong would make an impact now.

ma2rten• 7 years ago

You can search the title of the article in Google and use that link to get around the paywall.

pcr0• 7 years ago

Companies may start moving their Asia HQs to Singapore en masse.

sho3• 7 years ago

It's a pity most of the obvious regional alternatives are either too unwelcoming to foreigners or haven't gotten their shit together enough to be in the game. One would hope that Tokyo or Seoul could soak up the refugees but they're just too difficult to live in for English speakers - not to mention their hostile visa regimes. And the large South East Asia countries like Thailand, Malaysia and Indonesia all have horrendous infrastructure deficits, internal stability issues, archaic financial systems and endemic corruption. And Australia's just too damn far.

Singapore wins just by being open, competent, non-corrupt and there.

maphar• 7 years ago

http://archive.is/1TeqY

vore• 7 years ago

As an aside from the content of the article, I always feel a little off-put by this framing of major political issues as "how does this negatively affect the financial sector?" (I realize "Wall Street Journal" literally has "Wall Street" in the name)

Viewing this through a "how hard will it be to do business here" lens seems very clinical and dehumanizing, and I don't think the market would ever be able to capture the true consequences.

292355744930110• 7 years ago

If this sort of language is more effective affecting change for the better, then would you agree that it is good to use regardless of the "clinical" nature of the framing?

kodz4• 7 years ago

Ya one day they are moving out of London because of Brexit, another day out of Hong Kong because of China. If these Financial "Centers" are easy to move why does anyone need a Center in the first place?

esoterica• 7 years ago

Where did you get the impression the move was “easy”?

rolltiide4• 7 years ago

If these Financial "Centers" are easy to move why does anyone need a Center in the first place?

Because at one point you did. And the existence of those places worked on removing barriers of trade. And now those places are being dismantled while the barriers of trade are already removed.

So you get the luxury to look at it through the lens of the present, ignoring how it came to be completely.

At this point financial centers offer different collections of favorable regulations that you can choose at your own whim.

Separate jurisdictions shift nuances of law around and compete on this still.

For example, many people access the US markets through Delaware "because they heard" and have no idea what the other 49 states, 1 district, and 5 territories offer despite having complete autonomy to compete over the last 30 years.

Some of those 55 jurisdictions are faster, cheaper, have Chancery courts, have favorable court rulings completely opposite of Delaware, can lean on Delaware case law if desired, have newer and more interesting business types you can create, may be more private and anonymous, may be better for your business.

Thats how centers develop and their utility. Its mostly the ease of getting the local government to listen to the desires of ephemeral entrepreneurs.

multibit• 7 years ago

Some of those jurisdictions, such as?

robocat• 7 years ago

For example, many people access the US markets through Delaware "because they heard" and have no idea what the other 49 states

Unless another state has a very compelling benefit, why make things riskier and difficult?

Usually you want to find a solution that you can see works, that has a good network effects for professional services, and that has the largest number of similar businesses for stability (so that the state is not interested in causing problems directly or by side-effect, and the state has aligned incentives to help foreign businesses).

The same thing occurs with offshore havens. Network effects matter.

Network effects is given as a major reason for why YC recommends Delaware C-Corps: https://www.lawtrades.com/answers/y-combinator-startups-go-c...

bobthepanda2• 7 years ago

In terms of law, sure.

In terms of labor, specialists like having multiple employment options in case they ever need to jump ship, and for specialized enough services centers are the only places capable of offering such networks. New York is still the largest financial center in the US despite many attempts to dethrone it because it has built up so much of a center. And people don't really abandon centers unless something catastrophic happens.

lallysingh• 7 years ago

For labor. People specialize and need a reasonable pool of employers in an area for wage competition. Not just at initial hiring time, but to keep the raises competitive.

tepidandroid• 7 years ago

From my own observations, financial centres typically act as gateways into more heterogenous or poorly understood regions... like an API gateway of sorts for countries.

London acts as a financial centre for many businesses seeking to do business with EU nations. Hong Kong was historically the financial centre for traders seeking to do business with China. Being a former British colony, they had advantages such as being literate in English and understanding both eastern and western cultures.

If indeed globalization has not yet run its course, we may see less and less of a need for these financial centres in the future.

germanlee• 7 years ago

It's called propaganda. Go back 4 or 5 years ago. The NYTimes, Bloomberg, WSJ, etc all ran the same stories back then. The comments were the same. Usually some "expat" living there giving his "expert" propaganda or some "expat" talking about had he had to leave hong kong because it was so bad. Back then, there was a lot of "ghost cities" scare mongering. A lot less of it today. You notice the same patterns. The "britain tried to give democracy to hong kong" propaganda. The "people of hong kong" prefer britain propaganda. China is about to collapse.

Once the trade war nonsense ends, you'll see these stories and comments disappear. Just like all the "I hate facebook" stories and comments. Just like the "Russia controls everything in the US" stories and comments.

Until it's time for "We've always been at war with eurasia". If only these people cared about freedom here at home as much as they "care" about freedom in china. You'll notice that most of the people ( journalists and commenters ) crying about censorship, privacy, freedom etc in china are the same ones demanding more censorship, less privacy and less freedom here and on social media.

dang• 7 years ago

Would you please stop posting in the flamewar style to HN? It is not a place for ideological battle and this sort of comment is super low-quality, regardless of how good your underlying points are. Internet rage is the most predictable and tedious commodity here. It has the effect on thoughtful conversation that salt has on a slug.

https://news.ycombinator.com/newsguidelines.html

cryptonector2• 7 years ago

Because that's where the labor you need is. Because that's where the installed base (nowadays buildings, networks, data centers, ...) is. Because their legal and judicial frameworks are well adapted to the industry. Because of cultural inertia.

twic2• 7 years ago

Throwing away a valuable reputation for stability, and an economically crucial financial industry with it, because a hardline government won't compromise on chasing a deranged dream? I'm glad to see British traditions are still upheld in Hong Kong!

hangonhn2• 7 years ago

The British traditions of colonialism where by the governed had no voice in who governed them? The governor of Hong Kong was NEVER voted by the residents of HK but was selected by the government in UK. This was the exact arrangement that the Chinese kept in place. I don't love what China is doing to HK but let's not romanticize the British control of HK.

Edit: I don't want to give the impression that the British didn't do good things in HK but as far as governing goes, the UK maintained a very tight grip on HK until the very end. HK didn't elect its own legislature, IIRC, until 2 years before the handover.

sgt101• 7 years ago

I think GP was being a bit sarcastic..

jbay808• 7 years ago

It's worth recognizing that that was the case because China told the British that they would invade HK if the British gave them full self-determination.

nayuki• 7 years ago

Britain wanted Hong Kong to have a democratic government. China wouldn't let them.

documents recently released by the National Archives in Britain suggest that beginning in the 1950s, the colonial governors who ran Hong Kong repeatedly sought to introduce popular elections but abandoned those efforts in the face of pressure by Communist Party leaders in Beijing

https://www.nytimes.com/2014/10/28/world/asia/china-began-pu...

keiferski• 7 years ago

Democratic government and human rights are separate things. Generally the latter follows the former, but there have been scenarios in which an unelected government upholds rights. China currently has neither democratic representation nor human rights.

m23khan• 7 years ago

more and more, among upcoming global cities, Toronto and Dubai make the most sense for the next big financial centers.

rwmj• 7 years ago

Dubai and "rule of law" are not often things you hear in the same sentence.

spinchange• 7 years ago

Dublin

mensetmanusman• 7 years ago

Canada is blacklisted by China now because they stand up to China more often...

majia4• 7 years ago

because they stand up to the US less often...

geogra4• 7 years ago

by kidnapping the daughter of a corporate executive?

baby• 7 years ago

Dubai? Come on.

kyledrake• 7 years ago

China has been kidnapping people from Hong Kong for some time now (https://en.wikipedia.org/wiki/Causeway_Bay_Books_disappearan...) so I'm kind of surprised we're even having this debate. It's already too late to fix this perception for me, HK is dead as an autonomous, law-oriented region for my requirements. I pulled production servers out of HK in 2015.

Singapore is awesome and close enough that it fills the role that HK previously did before China started ruining it, and it's where I now run my Asia CDN edge. I'd rather run them in HK and get close hookups to China, but what can I tell you, I don't want dumbshit kommissars rummaging through my servers because someone put up a web site about how they murdered innocent people in Tiananmen square and are still trying to pretend it didn't happen.

majia4• 7 years ago

At least in HK you can still protest. In Singapore you’d be put into jail for public disturbance.

digianarchist• 7 years ago

Singapore is still a democracy albeit a deeply flawed one.

DeonPenny• 7 years ago

singapore seems like where people are going

radicaldreamer• 7 years ago

Singapore is more of an autocracy than Hong Kong... at least when it comes to freedom of expression, freedom of assembly etc.

arcticfox• 7 years ago

Singapore, not being tied at the hip to a superpower w/ enormous and diverse geopolitical interests, is less likely to use that iron fist unfairly to the detriment of foreign commerce.

odiroot• 7 years ago

And yet it functions like a well oiled machine.

bane• 7 years ago

Out of curiosity, what about Taiwan?

JBReefer• 7 years ago

How much longer will Taiwan choose to be an independent country? They seem to be getting pretty cozy with the mainland.

natal60• 7 years ago

Unfortunately the core problem with Singapore is it doesn't have the same access to China.

theredbox• 7 years ago

I am wondering if all of the people commenting here about HK and SG have any idea about both of those cities.

They are competitors but not really competitors.

You go to HK when you want to be in China but not really. You go to SG when you want to deal with China but not really.

bagacrap• 7 years ago

Not sure if I really know about these countries but I don't think this comment enlightened me.

majia4• 7 years ago

Freedom and democracy are never requirements for being a global financial center. What capitalists want are stable government, low tax and few regulations. They don’t care if some political dissents are sent to Beijing.

JumpCrisscross• 7 years ago

What capitalists want are stable government

Yes.

They don’t care if some political dissents are sent to Beijing

Yes, companies and investors care if a Hong Kong dispute can be spirited to a Chinese court if one of the litigants is well-connected in Beijing.

noobermin• 7 years ago

Nope, then said capitalists lead to grease those gears just like they do in America with donating to both political parties.

sremani• 7 years ago

Rule of Law is an important component.

AFascistWorld• 7 years ago

You know China arrested people during their stock market crash for "malicious shorting"? Then call on to "prop up the stock market for the country"?

thecleaner• 7 years ago

What kind of insensitive coverage is this ? The people of a country have come together to fight an oppressive regime and wsj is busy telling people Hong Kong cannot be trusted as a global finance center. This is so wrong.

anigbrowl• 7 years ago

The WSJ caters to people who are inclined towards capitalism, and money trumps principle for a good many folk.

Wowfunhappy• 7 years ago

If the situation impacts your business, you need to analyze it as a business. Commerce marches on.

zizee• 7 years ago

I understand and sympathize with your point of view.

However the risk of the international economy losing trust in Hong Kong and leaving is probably the biggest lever people calling for the continued independence of Hong Kong have available.

By highlighting this risk the WSJ is helping the cause of Hong Kong independence in one of the best ways it can.

theslurmmustflo• 7 years ago

Can the elites build Freeside already?

https://en.wikipedia.org/wiki/Tessier-Ashpool

Hong Kong’s Clout as a Global Financial Center Clouded by Uncertainty

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