Shanghai To Usurp Hong Kong As Top Financial Centre?

by Carla Johnson, Investors Offshore.com

18 September 2001

A recent survey conducted by Finance Asia has shown that Shanghai and other Asian financial centres are chipping away at Hong Kong's dominant position, with 43.2% of respondents stating that they believed Shanghai would overtake the SAR as top dog within 20 years.

According to the magazine's editor, Steven Irvine, only 15.38% of those polled believed that the jurisdiction, which has always been popular because of its lenient 'source based' tax system, had a firm grip on its position in an age increasingly dominated by baseless e-commerce. 'Our readers clearly believe the future is in Shanghai and not Hong Kong,' he observed.

These results were reflected throughout the survey; when asked where they would prefer to own property, 67.42% of respondents, made up of bankers and CFOs from Asia, the United States, and Europe, chose Shanghai over Hong Kong. The jurisdiction also scored low in estimations of government competence, trailing Singapore with a mere 17% of those polled believing that it was the best governed jurisdiction, according to Finance Asia.

However, Hong Kong can take some comfort from that the fact that its position at the top of the ladder seems safe for the moment, at least- despite their bearish long-term outlook for the jurisdiction, the majority (35.96%)of respondents still believed that it would be the dominent financial centre in Asia in 2010, while Shanghai garnered 28.65% of the vote, and Singapore only 15.17%.

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