China has stamped on Hong Kong’s democratic aspirations even as it embraces financial liberalisation; moves that cement the city’s future as the financial highway into mainland China.
The Chinese government will allow Hong Kong residents to vote for their leader from 2017 but only from a shortlist of Beijing loyalists. Pro-democracy groups vowed civil disobedience but increasingly acknowledged that was as much flexibility as they could win.
The clash comes as China speeds up the opening of its capital account and its brand of authoritarian capitalism is increasingly felt in global stock markets [see page 58]. The Hong Kong – Shanghai Stock Connect is the latest cross-border programme in a long list of financial reforms [see page 52].
China’s leadership wants a stable Hong Kong to achieve the delicate and gigantic fina ncial feat of opening up the world’s second-largest economy. For Beijing that means backing Hong Kong tycoons, many of whom feature in our 2014 Asia Rich List [see page 22] against a redistribution of power and wealth.
“Universal suffrage means the redistribution of economic interests amongst society,” said mainland legal scholar Wang Zhenmin. “If we just ignore their [Hong Kong tycoons’] interests, Hong Kong capitalism will stop,” he added.
Recent events in Hong Kong may confound Western think tanks, which have long held that China’s growing wealth and financial reform would eventually lead naturally to democratic capitalism.
Instead the Chinese Communist Party has maintained a monopoly on political power and continues to take a utilitarian approach rather than one based on inalienable rights of the individual. Hong Kong’s importance to Beijing has always been as a financial petri dish, not a political experimentation zone.
Hong Kong-based financial intermediaries will flourish in the financial gateway into and out of mainland China.
Other cities, such as Tokyo, are looking to make hay out of civil unrest in Hong Kong. However they are likely to be disappointed if they think firms will up sticks. The world’s four biggest accounting firms in a June ad said they were worried about protests in Hong Kong’s business centre disturbing stability.
About FinanceAsia Magazine
Established in 1996, FinanceAsia is the leading publisher of financial news in the Asia-Pacific region. Our combination of print and online products provide the latest news, analysis and insight into Asia’s financial markets.
Published monthly from our office in Hong Kong, FinanceAsia magazine provides our readers with the latest financial trends, interviews, features and investigative reports. The publication has a readership of key decision-makers at corporations, governments, investment and commercial banks, institutional investors, asset managers, brokers, traders and financial intermediaries.
Our regular sections include:
We look at the key data behind a topical theme in Asian finance, showcased with an array of graphs and tables.
A monthly opinion column from the FinanceAsia editorial team. We provide our thoughts on a topic making the headlines.
Deal of the Month
Our regular two-page spread with its signature artwork and in-depth analysis examines the equity, debt or M&A deal that we feel has had the biggest impact on the Asian capital markets that month.
For company CEOs and CFOs, what investors think is a critical concern, and in this column we help them understand just this. Each month we speak to a Chief Investment Officer of a top fund and outline their views on corporate governance, what stocks they like and where they expect to generate the best returns.
A monthly opinion piece from a respected author or commentator on Asian business, finance or economics.
People on the Move
Here we summarise the key hires, fires and moves at the region’s banks, highlighting at least one major move each month.
We examine the major primary markets deals of the month and comment on the quality of the debt or equity transaction and the secondary market performance.
The Arts of Finance
A light-hearted look at investment opportunities surrounding the arts business in Asia.