WEBVTT - Enda Curran on HK Summit (Audio)

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<v Speaker 1>Well, Hong Kong officials pushing to convince the world that

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<v Speaker 1>the Chinese territory remains the go to place in Asia

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<v Speaker 1>for finance. Hong Kong's summit for global bankers begins today

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<v Speaker 1>and joining us from Hong Kong is in a Karrent Bloomberg,

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<v Speaker 1>Chief Asia Economics correspondent, and there are colleagues. Shuley Ran

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<v Speaker 1>in opinion has written a piece saying the mood is

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<v Speaker 1>all gloom and doom, and and the bankers and asset

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<v Speaker 1>managers she's been speaking to a worried So how does

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<v Speaker 1>Hong Kong convince the world that it is the go

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<v Speaker 1>to place in Asia for finance? Well, Juliet, this is

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<v Speaker 1>a very important event for Hong Kong. From the government's idea.

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<v Speaker 1>Idea was to project this huge hub reopening, easing up

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<v Speaker 1>in the quarantine restrictions and on the COVID restrictions, bringing

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<v Speaker 1>the world's big bankers, and of course end the week

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<v Speaker 1>then with the Big Sevens rugby festival. But you'd have

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<v Speaker 1>to say it isn't quite playing out like that. The

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<v Speaker 1>mood music is pretty low to begin with. Several senior

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<v Speaker 1>finance executives have are not coming for one reason. Or

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<v Speaker 1>another starts taking some shine off it. Secondly, there's been

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<v Speaker 1>some practice issues around. For example, the Finance Secretary he

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<v Speaker 1>got COVID, so it became unclear whether or not Hong

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<v Speaker 1>Kong's own top economic official could be in attendance. And

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<v Speaker 1>then thirdly, we've had some weather related issues here. Hong

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<v Speaker 1>Kong strict rules around what happens when a typhoon is

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<v Speaker 1>hitting the city or even coming close to the city,

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<v Speaker 1>and that's cast a shadow over you know how that

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<v Speaker 1>might impact proceedings as well. So you would have to

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<v Speaker 1>say if the idea was that Hong Kong was going

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<v Speaker 1>to flick a switch and project itself as reopen to

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<v Speaker 1>the world, and here we go back to doing business

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<v Speaker 1>as normal, that doesn't seem to be the mood music

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<v Speaker 1>or the vibes. And as Sholey says in her own piece,

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<v Speaker 1>there's still a lot of concern, I think, and worry

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<v Speaker 1>among the bankers in Hong Kong indeed. And meanwhile we

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<v Speaker 1>are seeing, and it's always been a comparison, Singapore outpacing

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<v Speaker 1>Hong Kong, at least in some kind of rankings the

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<v Speaker 1>Global Financial Centers in Index, Singapore is Asia's top financial center.

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<v Speaker 1>So how do authorities try and convince money to come

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<v Speaker 1>back into Hong Kong. We heard the Finance Secretary Paul

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<v Speaker 1>Chan refusing claims that Hong Kong is losing its datas

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<v Speaker 1>in a bold post. Well, there's so much negative sentiment

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<v Speaker 1>around Hong Kong, I think primarily because it is on

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<v Speaker 1>this political fall clime. It's essentially caught between the US

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<v Speaker 1>and China, so it's in the middle of that fairly

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<v Speaker 1>tense geopolitical competitive sort of back and forwarth it's going

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<v Speaker 1>on between both governments, and as long as that's happening,

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<v Speaker 1>you have to say it's going to cast doubt over

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<v Speaker 1>Hong Kong. You know, take for example, the practical measures

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<v Speaker 1>there are sanctions against the leader Hong Kong, John Lee.

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<v Speaker 1>You have a situation where by Wall Street bankers are

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<v Speaker 1>having to tread a line of attending a conference that's

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<v Speaker 1>been led by someone who's under sanctions by the US government.

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<v Speaker 1>That's obviously a very very difficult for them to maneuver.

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<v Speaker 1>So the sentiment towards Hong Kong is very negative, and

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<v Speaker 1>I don't think there's a lot of Hong Kong can

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<v Speaker 1>do about that given what's happening. But between Beijing and Washington.

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<v Speaker 1>But then there's the other story, which is a broader

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<v Speaker 1>global economic backshrop, which is also negative for Hong Kong.

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<v Speaker 1>The whole story about rising interest rates, money or trunning

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<v Speaker 1>back to the US, money leaving China slow down, and

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<v Speaker 1>global trade, the slowing in house prices are as real

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<v Speaker 1>estate prices, which is such a cretial component of revenue

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<v Speaker 1>for Hong Kong's government. All of those kind of macroeconomic

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<v Speaker 1>measures are also going in the wrong direction for Hong Kong.

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<v Speaker 1>So there's always been a narrative around Hong Kong, which

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<v Speaker 1>is quite right that it has rebounded from testing periods

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<v Speaker 1>in the past, But you'd have to say this time

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<v Speaker 1>around that theory it's going to be tested given the

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<v Speaker 1>amount of different variables that are going against Hong Kong

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<v Speaker 1>all all the same time. I mean, you've lived there

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<v Speaker 1>throughout the pandemic, so no doubt you would have seen

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<v Speaker 1>people leave to and probably some of your friends. What

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<v Speaker 1>do we see in terms of the high net worth

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<v Speaker 1>individuals leaving Hong Kong, So there has been a significant exodus.

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<v Speaker 1>I think they figure used by the government is certainly

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<v Speaker 1>well over one hundred and fifty thousand, maybe around tun

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<v Speaker 1>or thousand people have left in the past year or so.

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<v Speaker 1>It's obviously a still a place to do business. It's

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<v Speaker 1>obviously still the financial capital for China. Shanghai remains behind

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<v Speaker 1>the capital border. As long as that remains to be

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<v Speaker 1>the case, Hong Kong is business model won't change. So

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<v Speaker 1>it does attract talent, it doesn't money, however, clearly, as

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<v Speaker 1>I was saying at the beginning, at the beginning there

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<v Speaker 1>it's losing a lot of its lustra as an international

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<v Speaker 1>kind of place to go and do business on a

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<v Speaker 1>freewheeling basis now being seen as complicated. It's part of

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<v Speaker 1>the China story. Singapore course doesn't have those complications. Dubai

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<v Speaker 1>doesn't really have those complications per se. So there is

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<v Speaker 1>money here. There will always be Chinese money here, Juliette,

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<v Speaker 1>But you have to say, clearly, clearly, some of that

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<v Speaker 1>is also being diverted to alternatives as well when it

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<v Speaker 1>comes to the Singapore picture, or indeed anywhere else that

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<v Speaker 1>might attract talent. You look at the likes of Dubai too.

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<v Speaker 1>I mean, we had John Lee outline some of those

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<v Speaker 1>measures to attract talent about a month ago. What struck

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<v Speaker 1>me though, was the fact that the visa was for

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<v Speaker 1>a shorter period of time than Singapore's and it attracted

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<v Speaker 1>a higher salary. So it's Hong Kong kind of just

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<v Speaker 1>not shooting itself in the foot with these with these

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<v Speaker 1>tougher measures to get talent visas. Yeah, I think, I mean,

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<v Speaker 1>you know, if she stepped back to where the world

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<v Speaker 1>was just a the beginning of this year, broadly speaking,

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<v Speaker 1>much of Asia was under the same kind of lockdown

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<v Speaker 1>or these border restrictions. But these other countries like Australia

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<v Speaker 1>and Singapore and elsewhere, they flick the switch and they reopened,

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<v Speaker 1>and they told him, they told the world we've reopened.

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<v Speaker 1>Hong Kong hasn't done that. They've been kind of in

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<v Speaker 1>First of all, it had a very difficult six months

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<v Speaker 1>of the year to begin with, with the COVID outbreak

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<v Speaker 1>and everything else and trying impose restrictions, and then of

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<v Speaker 1>course their reopening has been quite staggered, and people don't

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<v Speaker 1>really have the patience for that, and people even question

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<v Speaker 1>why that's effective to begin anyway. So then they come

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<v Speaker 1>along with these measures and like you mentioned, and then

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<v Speaker 1>the policy address, let's try and put some visas out

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<v Speaker 1>there to attract some talent. But you have to say,

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<v Speaker 1>is it really about visas? Is that the reason people

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<v Speaker 1>aren't coming here, or is it just because of a

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<v Speaker 1>of course, how you've handled a pandemic or the aftermath

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<v Speaker 1>of the pandemic, and then be the whole China back

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<v Speaker 1>to up story. So Julia, people can argue about the

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<v Speaker 1>pros and cons of the visa program to have enough

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<v Speaker 1>for how it compares to other jurisdictions. But I think

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<v Speaker 1>this is a bigger picture than visas. It's really fundamental

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<v Speaker 1>about how Hong Kong sits between the US and China,

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<v Speaker 1>and of course how Hong Kong runs his own affairs

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<v Speaker 1>on the ground. To alright, talk out global audience through

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<v Speaker 1>the shocker g d P print we got though from

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<v Speaker 1>Hong Kong, and we know that that will turn around

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<v Speaker 1>when COVID zero eases. But it's a pretty die number. Now.

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<v Speaker 1>It was a very bad read for Hong Kong's economy.

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<v Speaker 1>It shows the depth of what's happening. You know, at

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<v Speaker 1>the beginning of the year Juliet, there was a feeling that, oh,

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<v Speaker 1>the Hong Kong economy suffering because of all of the

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<v Speaker 1>restrictions so people aren't spending and shopping, so you could

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<v Speaker 1>you could nut that out. But now, of course you've

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<v Speaker 1>come beyond that. I mean, on the ground whatever for

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<v Speaker 1>all the restrictions in Hong Kong. On the ground, actually

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<v Speaker 1>it's been wide open from months in terms of activities

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<v Speaker 1>and people going around, et cetera. And yet the consumption

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<v Speaker 1>side of things remains a weak. People aren't spending the

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<v Speaker 1>way they used to. That's happening now at the same

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<v Speaker 1>time that real estate prices are coming off. That's a

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<v Speaker 1>key source of economic activity and investment in development for

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<v Speaker 1>the government. So that's coming off, and the port is

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<v Speaker 1>starting to slow down because of the whole big trade

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<v Speaker 1>boom stories coming off the ball, so that's losing ground.

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<v Speaker 1>And then throw into the mixed of rising fed rates,

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<v Speaker 1>which of course sucks capital out of Hong Kong. So

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<v Speaker 1>now you're in a charity word. This isn't about COVID anymore.

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<v Speaker 1>The COVID story you could argue with hitting the consumers,

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<v Speaker 1>it's no longer just that. It's about a whole range

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<v Speaker 1>of global factors that is hammering Hong Kong's economy. And

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<v Speaker 1>it goes to the point that Hong Kong hasn't been

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<v Speaker 1>able to fickus whitch and say hey, we're reopen for business.

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<v Speaker 1>It's back to normal. That point hasn't happened at all,

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<v Speaker 1>all right, and negative four and a half percent, Brian

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<v Speaker 1>telling me you're on here the Hong Kong Economy. Indo Karen,

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<v Speaker 1>thank you as always great reporting. Indo Karen is Bloomberg

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<v Speaker 1>Chief Asia Economics correspondent with US in Hong Kong, where

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<v Speaker 1>the Hong Kong Summit for global bankers began yesterday, with

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<v Speaker 1>officials trying to convince the world the Chinese territory does

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<v Speaker 1>remain the go to place in Asia for finance