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Hong Kong Remains World's Leading Financial Centre

by Mary Swire,, Hong Kong

05 November 2012

In the latest Financial Development Report issued by the World Economic Forum (WEF), measuring the factors enabling the development of financial systems in 62 worldwide economies, the top three spots are held by countries hosting major financial centres, with Hong Kong remaining first, followed by the United States and the United Kingdom.

Hong Kong first rose to the top of the WEF index last year, becoming the first Asian financial centre to achieve this rank. This year, Hong Kong not only maintains its position, but also manages to increase its relative score, thereby creating a wider gap between it and the US.

Hong Kong’s increase in relative score can be attributed to higher scores in both banking and financial services, and financial markets, respectively, due mostly to an increase in the size and efficiency of the banking sector, and strong equity and bond markets.

Those markets, the report continues, profited strongly from the contribution of Mainland Chinese companies. For example, in 2011, 43% of firms listed on the Hong Kong Stock Exchange were Mainland Chinese companies, accounting for 56% of the Exchange’s market capitalization.

In second position, the US has seen little movement since last year but shows an improvement in rank within the financial stability pillar, as its banking system is becoming more stable. In third place, the UK gained from a decrease in the burden of government regulation benefiting the institutional environment, but lost ground through a drop in currency stability.

Hong Kong’s Financial Secretary John Tsang said the government welcomed the WEF’s recognition of Hong Kong’s leading position among international financial centres.

"Hong Kong is highly competitive vis-à-vis most other financial systems in the world, especially in terms of contract enforcement, taxes and the infrastructure of the business environment, as well as the efficiency of banking financial services,” he said. “Our strengths in IPO activity, equity market development and commercial access are also well recognized by the WEF.”

"We will study the report carefully for any further useful comments on Hong Kong,” he concluded. “We will continue to strengthen Hong Kong in various aspects as a leading financial centre and as the Mainland's offshore renminbi centre."

TAGS: investment | business | law | banking | financial services | equity investment | United Kingdom | enforcement | offshore | Hong Kong | United States | currency | regulation | services

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