The United States intervenes in the Iran-Israel conflict, and Iran plans to blockade the Strait of Hormuz, cutting off a critical oil and natural gas export route in the Middle East, posing a new round of shocks to the global political and economic environment.
Hong Kong's Financial Secretary, Paul Chan, noted yesterday (June 23) that Hong Kong, with its stable policies and transparent regulatory environment, coupled with support from the nation and the rise of Global South countries, has become a "haven" for global investors during turbulent times.
This, according to Chan, became evident in the recent rebound in the stock market and a significant increase in bank deposits. Hong Kong's asset and wealth management industry manages over US$4 trillion in funds, with two-thirds coming from outside the city.
Speaking at the 18th annual conference of the Hong Kong Investment Funds Association (HKIFA) yesterday, Chan noted that recent U.S. government policy uncertainties and escalating geopolitical tensions have introduced volatility into investment markets. In recent months, substantial inflows of overseas capital have boosted the performance of Hong Kong's stock and IPO markets, with the latest data reflecting strong international recognition of Hong Kong's financial market strength.
Rise of Global South
Chan highlighted that the global economic influence is undergoing a rebalancing, particularly with the rise of Global South countries, which presents more opportunities for Hong Kong's asset and wealth management industry. Today, Global South countries account for 40% of global GDP and contribute up to 80% of global economic growth, indicating significant future economic potential.
For instance, mainland China's economy grew by 5.4% in the first quarter, with strong growth momentum expected to continue in the second quarter. Amid global headwinds, the mainland's commitment to high-level openness and high-quality development reinforces its role as a stabilizing force and a long-term growth driver.
Chan added that despite ongoing tensions in the Middle East, many Gulf Cooperation Council (GCC) countries have shown resilient economic growth and are advancing agendas for economic diversification, including financial market reforms. Additionally, driven by rapid industrialization, large-scale infrastructure investments, a growing middle class, and expanding consumer markets, several ASEAN economies are also rising swiftly.
Tax incentives: Accelerating asset management industry growth
To further develop Hong Kong's asset and wealth management industry, Chan stated that the government plans to expand the types of eligible transactions for tax concessions for funds and single-family offices, to submit a draft bill next year for implementation in the 2025/26 tax year.
He noted that the latest statistics show Hong Kong's asset management scale exceeds US$4 trillion, equivalent to over 10 times its GDP, with two-thirds of the funds sourced from outside Hong Kong. Currently, Hong Kong has 2,700 family offices, a number expected to soon reach 3,000.
Separately, Secretary for Financial Services and the Treasury Christopher Hui wrote on social media yesterday that Hong Kong's financial market has demonstrated unprecedented vitality and opportunities under the protection of the Hong Kong National Security Law.
This year, Hong Kong's IPO fundraising has ranked among the highest globally. Over 2,700 single-family offices operate in Hong Kong, more than half of which manage assets exceeding US$50 million.
"All of this is attributed to the stability and certainty injected into Hong Kong's business environment by the National Security Law, making the city a top choice for global investors."
Deepening Mainland-Hong Kong connectivity for new momentum
Looking ahead, Hui stated that Hong Kong will continue to uphold the holistic view of national security, balancing high-quality development with high-level security, fully leveraging the advantages of "one country, two systems," actively integrating into national development, and deepening international cooperation.
"The government will further optimize financial market systems and enhance financial connectivity between the mainland and Hong Kong. At the same time, Hong Kong will actively advance green finance and fintech development, explore the integration of traditional finance and digital assets, and establish itself as a hub for international high-end talent, injecting new growth momentum into Hong Kong's financial markets."
Hong Kong's wealth management
● Hong Kong's asset and wealth management industry oversees over US$4 trillion in funds, with two-thirds sourced from outside Hong Kong. The city is projected to become the world's largest asset management center by 2028.
● Hong Kong's private equity and venture capital funds manage nearly US$230 billion in assets, ranking second in Asia after the mainland.
● Hong Kong handles about 80% of global offshore RMB transactions, making it the most active hub for RMB forex and dim sum bond markets.
● As of March this year, the number of registered funds in Hong Kong reached 976, with net inflows of over US$44 billion year-on-year, a 285% increase.
International standing
● In the IMD World Competitiveness Yearbook 2025, Hong Kong rose to third place globally.
● In the 37th Global Financial Centres Index, Hong Kong maintained its position as the world's third-leading financial center.
● The three major international rating agencies recently affirmed Hong Kong's credit ratings, unanimously assigning a "stable" outlook.
Stock
● Hong Kong's IPO fundraising in the first half of this year reached HK$102.1 billion, a 673% year-on-year surge, ranking first globally.
● The Hang Seng Index rose 18% last year and has gained over 15% this year.
● Total market capitalization of Hong Kong stocks: nearly HK$41 trillion, up 24% year-on-year.
● Average daily turnover: HK$242 billion, a 120% year-on-year increase.
(Source: Wen Wei Po; Journalist: Sum Kin-lok; English Editor: Darius)
Related News:
Deepline | From H-shares to Connect Hub: HKEX celebrates 25 years linking China and global markets
Deepline | 3rd ranking in World Competitiveness Yearbook! John Lee: Policies make progress
Comment