Occupying an advantageous location between the East and the West, Hong Kong has cemented its place as a global business hotspot. Serving as the gateway to mainland China, the island has further enhanced its reach as a "super-connector" in international trade, finance and business. From its recent reforms to government-led incentives for investors, here are the main reasons why Hong Kong is set to dominate the financial sphere in the years to come.

Hong Kong - Photo by Simon Zhu on Unsplash

The main reason why Hong Kong will not be dethroned as a global finance hub is due to its role as a facilitator for the Chinese economy. Having played a pivotal role in the reformation of the mainland's economic policies of late, Hong Kong has been instrumental in the opening up of the Chinese market to the rest of the trading world. In a sense, Hong Kong made it possible for China to enter the global stage and continues to aid Chinese businesses, entrepreneurs and institutions to expand their horizons beyond local interests and to make the world their playing field. This is nothing new as Hong Kong has been playing this role for the past 40 years. Hong Kong has also supplied financial support to these same institutions via the country's international capital market.

The internationalisation of the Renminbi marked the opening up of China's capital markets to global trade. In less than a decade since its launch, the Shanghai-Hong Kong Stock Connect initiative has broadened its scope to encompass not only financial products but also exchange-traded funds and bonds. Risk management programmes are also part of the Shanghai-Hong Kong Stock Connect's portfolio as the initiative breaks new ground and attracts international investors to mainland business projects. Hong Kong's financial sector has demonstrated exceptional skill in converting the previously closed Chinese market towards opening up its policies and becoming more international. This is particularly impressive given the magnitude of the Chinese market, and it has helped to solidify Hong Kong's position as a financial epicentre. As a result, investors are no longer hesitant to consider Hong Kong as the world's leading source of talent and capital.

While Hong Kong's financial credentials when it comes to international business have always been exceptional, it is the One Country, Two Systems strategy that has been the foundation of the island's success and progress in this sphere. Chinese Premier Li Qiang reiterated Hong Kong's status as a facilitator for China's foray into the global sphere when he spoke at the 2023 China Development Forum. Laying out plans China has to open up to the world in the years to come, the premier could not have been clearer about the role Hong Kong will play in China's economic future.

Singapore was once regarded as the leading financial hub in Asia. However, it appears that Wall Street now prefers Hong Kong over Singapore, although Singapore continues to leverage Hong Kong's success. Businesses that seek to enter the world's second-largest economy look to Hong Kong as the first option, and Singapore's Southeast Asian market access seems less attractive. Singapore can only offer a gateway to a population of 680 million people spread out across 10 countries, whereas Hong Kong provides access to China's economy worth $18 trillion along with its 1.4 billion people. According to a report by Preqin Ltd, Hong Kong is not only home to some of the best business facilities and amenities in the form of Causeway Bay hotels such as the Cosmo Hotel Hong Kong and others but the country is also where 50% of the Asian hedge fund managers live.