Hong Kong – an international financial centre
“Hong Kong retains its position as an important trade and financial centre in one of the world’s most dynamic regions,” according to the Consul General Lars Danielsson, when he spoke at Mannheimer Swartling’s offices before the Royal Society Sweden – Hong Kong
The Royal Society Sweden – Hong Kong had invited the new consul general to its lunch meeting in November – as usual hosted by Mannheimer Swartling. After approximately a month and a half in his new position, Mr. Danielsson reflected on the financial and political development in Hong Kong and China against the backdrop of the current financial crisis. He considers that the Chinese economy is sufficiently strong to help the rest of the world come through the crisis. “There is tremendous expertise in the financial sector and Hong Kong’s financial market has so far managed the financial crisis very well,” says Mr. Danielsson.
Mannheimer Swartling opened offices in Hong Kong and Shanghai in 2007. Today, there are 20 lawyers in these offices providing clients with legal advice using their extensive experience of China, the Chinese market and Chinese rules and regulations. Thomas Lagerqvist, the resident partner in Hong Kong comments, “What Mr. Danielsson says confirms that the firm’s decision to open offices in both Hong Kong and Shanghai has its merits.”
Hong Kong has been forced to reinvent itself from time to time. This was particularly true as Hong Kong transitioned from being a centre for manufacturing to being the purely service-oriented economy it is today. More than 90 per cent of Hong Kong’s GDP is related to the service sector. The heavy emphasis on manufacturing has been replaced by an industry of services geared toward commerce and the investment and finance sectors. The economic integration with China has been a continuous process that was initiated when Hong Kong was reunited with China in 1997.
Mr. Lagerqvist is of the opinion that this economic integration is positive as long as China respects Hong Kong’s autonomy under the Basic Law (Hong Kong’s mini constitution). “It is even more positive that China has officially declared that Hong Kong is its international financial centre and Shanghai its domestic financial centre. Hong Kong’s old role as a bridge into China has been replaced with new and more sophisticated roles.” Nowadays, Hong Kong thrives on the situation which Mr. Lagerqvist says the Deputy Governor of the Central Bank of China describes as follows: “China is like a besieged castle. Everyone on the outside wants to get in, while everyone on the inside wants to get out.”
But Mr. Danielsson also highlighted the challenges China faces during its continued development. He says that a difficult adjustment is to be expected, where the respect for legal principles and the freedom to exchange thoughts and opinions will be increasingly more important. It will also be necessary to attract the redundant work force from the rich coastal regions. If Hong Kong is to keep and develop its position as “Asia’s World City,” political stimulus packages as well as concrete improvements of English language education in schools will be required. The Chinese must also be encouraged to spend more money. Currently, the Chinese are the people who save the most money in the world due to the lack of social security systems.
But Mr. Danielsson believes in Hong Kong, “There is a basic confidence in Hong Kong’s ability to deal with the situation. Hong Kong is more active today when it comes to selling itself and is also more active regarding investments in other countries.” He feels that there will be gloomy financial headlines for at least another year, but then Hong Kong/China will continue to be one of the world’s most dynamic regions.
Mannheimer Swartling in Hong Kong and Shanghai:
The offices in China are primarily focused on foreign direct investments, acquisitions, restructuring of existing investments, intellectual property law and international arbitration proceedings. The Hong Kong office also provides services such as “company secretary” for a great number of companies and assists with trademark applications.
Facts on Hong Kong:
Trade between Hong Kong and Sweden dates back to the days of the East India Company in the 18th century. Approximately 160 Swedish companies, banks and financial institutes currently have offices in Hong Kong. Practically all international banks are represented in Hong Kong, as well as international accounting firms and law firms. Many international companies (approximately 55 per cent) use Hong Kong as a platform for operations throughout the region, most often in the form of regional head offices. Approximately 50 per cent of Hong Kong’s GNP is based on the foreign presence in Hong Kong. Since 1997, Hong Kong is a special administrative region in the Peoples’ Republic of China. But Hong Kong is still an independent customs area with a right to determine on import and export, trade practice, etc.,as it did during the period when it was a British colony. Under the Basic Law, Hong Kong shall keep its free capitalistic system until 2047 under the concept called “One Country, Two Systems.”