Speaker 1: Well, Hong Kong officials pushing to convince the world that
Speaker 1: the Chinese territory remains the go to place in Asia
Speaker 1: for finance. Hong Kong's summit for global bankers begins today
Speaker 1: and joining us from Hong Kong is in a Karrent Bloomberg,
Speaker 1: Chief Asia Economics correspondent, and there are colleagues. Shuley Ran
Speaker 1: in opinion has written a piece saying the mood is
Speaker 1: all gloom and doom, and and the bankers and asset
Speaker 1: managers she's been speaking to a worried So how does
Speaker 1: Hong Kong convince the world that it is the go
Speaker 1: to place in Asia for finance? Well, Juliet, this is
Speaker 1: a very important event for Hong Kong. From the government's idea.
Speaker 1: Idea was to project this huge hub reopening, easing up
Speaker 1: in the quarantine restrictions and on the COVID restrictions, bringing
Speaker 1: the world's big bankers, and of course end the week
Speaker 1: then with the Big Sevens rugby festival. But you'd have
Speaker 1: to say it isn't quite playing out like that. The
Speaker 1: mood music is pretty low to begin with. Several senior
Speaker 1: finance executives have are not coming for one reason. Or
Speaker 1: another starts taking some shine off it. Secondly, there's been
Speaker 1: some practice issues around. For example, the Finance Secretary he
Speaker 1: got COVID, so it became unclear whether or not Hong
Speaker 1: Kong's own top economic official could be in attendance. And
Speaker 1: then thirdly, we've had some weather related issues here. Hong
Speaker 1: Kong strict rules around what happens when a typhoon is
Speaker 1: hitting the city or even coming close to the city,
Speaker 1: and that's cast a shadow over you know how that
Speaker 1: might impact proceedings as well. So you would have to
Speaker 1: say if the idea was that Hong Kong was going
Speaker 1: to flick a switch and project itself as reopen to
Speaker 1: the world, and here we go back to doing business
Speaker 1: as normal, that doesn't seem to be the mood music
Speaker 1: or the vibes. And as Sholey says in her own piece,
Speaker 1: there's still a lot of concern, I think, and worry
Speaker 1: among the bankers in Hong Kong indeed. And meanwhile we
Speaker 1: are seeing, and it's always been a comparison, Singapore outpacing
Speaker 1: Hong Kong, at least in some kind of rankings the
Speaker 1: Global Financial Centers in Index, Singapore is Asia's top financial center.
Speaker 1: So how do authorities try and convince money to come
Speaker 1: back into Hong Kong. We heard the Finance Secretary Paul
Speaker 1: Chan refusing claims that Hong Kong is losing its datas
Speaker 1: in a bold post. Well, there's so much negative sentiment
Speaker 1: around Hong Kong, I think primarily because it is on
Speaker 1: this political fall clime. It's essentially caught between the US
Speaker 1: and China, so it's in the middle of that fairly
Speaker 1: tense geopolitical competitive sort of back and forwarth it's going
Speaker 1: on between both governments, and as long as that's happening,
Speaker 1: you have to say it's going to cast doubt over
Speaker 1: Hong Kong. You know, take for example, the practical measures
Speaker 1: there are sanctions against the leader Hong Kong, John Lee.
Speaker 1: You have a situation where by Wall Street bankers are
Speaker 1: having to tread a line of attending a conference that's
Speaker 1: been led by someone who's under sanctions by the US government.
Speaker 1: That's obviously a very very difficult for them to maneuver.
Speaker 1: So the sentiment towards Hong Kong is very negative, and
Speaker 1: I don't think there's a lot of Hong Kong can
Speaker 1: do about that given what's happening. But between Beijing and Washington.
Speaker 1: But then there's the other story, which is a broader
Speaker 1: global economic backshrop, which is also negative for Hong Kong.
Speaker 1: The whole story about rising interest rates, money or trunning
Speaker 1: back to the US, money leaving China slow down, and
Speaker 1: global trade, the slowing in house prices are as real
Speaker 1: estate prices, which is such a cretial component of revenue
Speaker 1: for Hong Kong's government. All of those kind of macroeconomic
Speaker 1: measures are also going in the wrong direction for Hong Kong.
Speaker 1: So there's always been a narrative around Hong Kong, which
Speaker 1: is quite right that it has rebounded from testing periods
Speaker 1: in the past, But you'd have to say this time
Speaker 1: around that theory it's going to be tested given the
Speaker 1: amount of different variables that are going against Hong Kong
Speaker 1: all all the same time. I mean, you've lived there
Speaker 1: throughout the pandemic, so no doubt you would have seen
Speaker 1: people leave to and probably some of your friends. What
Speaker 1: do we see in terms of the high net worth
Speaker 1: individuals leaving Hong Kong, So there has been a significant exodus.
Speaker 1: I think they figure used by the government is certainly
Speaker 1: well over one hundred and fifty thousand, maybe around tun
Speaker 1: or thousand people have left in the past year or so.
Speaker 1: It's obviously a still a place to do business. It's
Speaker 1: obviously still the financial capital for China. Shanghai remains behind
Speaker 1: the capital border. As long as that remains to be
Speaker 1: the case, Hong Kong is business model won't change. So
Speaker 1: it does attract talent, it doesn't money, however, clearly, as
Speaker 1: I was saying at the beginning, at the beginning there
Speaker 1: it's losing a lot of its lustra as an international
Speaker 1: kind of place to go and do business on a
Speaker 1: freewheeling basis now being seen as complicated. It's part of
Speaker 1: the China story. Singapore course doesn't have those complications. Dubai
Speaker 1: doesn't really have those complications per se. So there is
Speaker 1: money here. There will always be Chinese money here, Juliette,
Speaker 1: But you have to say, clearly, clearly, some of that
Speaker 1: is also being diverted to alternatives as well when it
Speaker 1: comes to the Singapore picture, or indeed anywhere else that
Speaker 1: might attract talent. You look at the likes of Dubai too.
Speaker 1: I mean, we had John Lee outline some of those
Speaker 1: measures to attract talent about a month ago. What struck
Speaker 1: me though, was the fact that the visa was for
Speaker 1: a shorter period of time than Singapore's and it attracted
Speaker 1: a higher salary. So it's Hong Kong kind of just
Speaker 1: not shooting itself in the foot with these with these
Speaker 1: tougher measures to get talent visas. Yeah, I think, I mean,
Speaker 1: you know, if she stepped back to where the world
Speaker 1: was just a the beginning of this year, broadly speaking,
Speaker 1: much of Asia was under the same kind of lockdown
Speaker 1: or these border restrictions. But these other countries like Australia
Speaker 1: and Singapore and elsewhere, they flick the switch and they reopened,
Speaker 1: and they told him, they told the world we've reopened.
Speaker 1: Hong Kong hasn't done that. They've been kind of in
Speaker 1: First of all, it had a very difficult six months
Speaker 1: of the year to begin with, with the COVID outbreak
Speaker 1: and everything else and trying impose restrictions, and then of
Speaker 1: course their reopening has been quite staggered, and people don't
Speaker 1: really have the patience for that, and people even question
Speaker 1: why that's effective to begin anyway. So then they come
Speaker 1: along with these measures and like you mentioned, and then
Speaker 1: the policy address, let's try and put some visas out
Speaker 1: there to attract some talent. But you have to say,
Speaker 1: is it really about visas? Is that the reason people
Speaker 1: aren't coming here, or is it just because of a
Speaker 1: of course, how you've handled a pandemic or the aftermath
Speaker 1: of the pandemic, and then be the whole China back
Speaker 1: to up story. So Julia, people can argue about the
Speaker 1: pros and cons of the visa program to have enough
Speaker 1: for how it compares to other jurisdictions. But I think
Speaker 1: this is a bigger picture than visas. It's really fundamental
Speaker 1: about how Hong Kong sits between the US and China,
Speaker 1: and of course how Hong Kong runs his own affairs
Speaker 1: on the ground. To alright, talk out global audience through
Speaker 1: the shocker g d P print we got though from
Speaker 1: Hong Kong, and we know that that will turn around
Speaker 1: when COVID zero eases. But it's a pretty die number. Now.
Speaker 1: It was a very bad read for Hong Kong's economy.
Speaker 1: It shows the depth of what's happening. You know, at
Speaker 1: the beginning of the year Juliet, there was a feeling that, oh,
Speaker 1: the Hong Kong economy suffering because of all of the
Speaker 1: restrictions so people aren't spending and shopping, so you could
Speaker 1: you could nut that out. But now, of course you've
Speaker 1: come beyond that. I mean, on the ground whatever for
Speaker 1: all the restrictions in Hong Kong. On the ground, actually
Speaker 1: it's been wide open from months in terms of activities
Speaker 1: and people going around, et cetera. And yet the consumption
Speaker 1: side of things remains a weak. People aren't spending the
Speaker 1: way they used to. That's happening now at the same
Speaker 1: time that real estate prices are coming off. That's a
Speaker 1: key source of economic activity and investment in development for
Speaker 1: the government. So that's coming off, and the port is
Speaker 1: starting to slow down because of the whole big trade
Speaker 1: boom stories coming off the ball, so that's losing ground.
Speaker 1: And then throw into the mixed of rising fed rates,
Speaker 1: which of course sucks capital out of Hong Kong. So
Speaker 1: now you're in a charity word. This isn't about COVID anymore.
Speaker 1: The COVID story you could argue with hitting the consumers,
Speaker 1: it's no longer just that. It's about a whole range
Speaker 1: of global factors that is hammering Hong Kong's economy. And
Speaker 1: it goes to the point that Hong Kong hasn't been
Speaker 1: able to fickus whitch and say hey, we're reopen for business.
Speaker 1: It's back to normal. That point hasn't happened at all,
Speaker 1: all right, and negative four and a half percent, Brian
Speaker 1: telling me you're on here the Hong Kong Economy. Indo Karen,
Speaker 1: thank you as always great reporting. Indo Karen is Bloomberg
Speaker 1: Chief Asia Economics correspondent with US in Hong Kong, where
Speaker 1: the Hong Kong Summit for global bankers began yesterday, with
Speaker 1: officials trying to convince the world the Chinese territory does
Speaker 1: remain the go to place in Asia for finance