Enda Curran on HK Summit (Audio)

Chief Asia Economics correspondent, and there are colleagues. Shuley Ran in opinion has written a piece saying the mood is all gloom and doom, and and the bankers and asset managers she's been speaking to a worried So how does Hong Kong convince the world that it is the go to place in Asia for finance? Well, Juliet, this is a very important event for Hong Kong. From the government's idea.

Idea was to project this huge hub reopening, easing up in the quarantine restrictions and on the COVID restrictions, bringing the world's big bankers, and of course end the week then with the Big Sevens rugby festival. But you'd have to say it isn't quite playing out like that. The mood music is pretty low to begin with. Several senior finance executives have are not coming for one reason. Or another starts taking some shine off it. Secondly, there's been

some practice issues around. For example, the Finance Secretary he got COVID, so it became unclear whether or not Hong Kong's own top economic official could be in attendance. And then thirdly, we've had some weather related issues here. Hong Kong strict rules around what happens when a typhoon is hitting the city or even coming close to the city, and that's cast a shadow over you know how that

might impact proceedings as well. So you would have to say if the idea was that Hong Kong was going to flick a switch and project itself as reopen to the world, and here we go back to doing business as normal, that doesn't seem to be the mood music or the vibes. And as Sholey says in her own piece, there's still a lot of concern, I think, and worry

among the bankers in Hong Kong indeed. And meanwhile we are seeing, and it's always been a comparison, Singapore outpacing Hong Kong, at least in some kind of rankings the Global Financial Centers in Index, Singapore is Asia's top financial center. So how do authorities try and convince money to come back into Hong Kong. We heard the Finance Secretary Paul Chan refusing claims that Hong Kong is losing its datas

in a bold post. Well, there's so much negative sentiment around Hong Kong, I think primarily because it is on this political fall clime. It's essentially caught between the US and China, so it's in the middle of that fairly tense geopolitical competitive sort of back and forwarth it's going on between both governments, and as long as that's happening, you have to say it's going to cast doubt over

Hong Kong. You know, take for example, the practical measures there are sanctions against the leader Hong Kong, John Lee. You have a situation where by Wall Street bankers are having to tread a line of attending a conference that's been led by someone who's under sanctions by the US government. That's obviously a very very difficult for them to maneuver. So the sentiment towards Hong Kong is very negative, and I don't think there's a lot of Hong Kong can

do about that given what's happening. But between Beijing and Washington. But then there's the other story, which is a broader global economic backshrop, which is also negative for Hong Kong. The whole story about rising interest rates, money or trunning back to the US, money leaving China slow down, and global trade, the slowing in house prices are as real estate prices, which is such a cretial component of revenue

for Hong Kong's government. All of those kind of macroeconomic measures are also going in the wrong direction for Hong Kong. So there's always been a narrative around Hong Kong, which is quite right that it has rebounded from testing periods in the past, But you'd have to say this time around that theory it's going to be tested given the amount of different variables that are going against Hong Kong

all all the same time. I mean, you've lived there throughout the pandemic, so no doubt you would have seen people leave to and probably some of your friends. What do we see in terms of the high net worth individuals leaving Hong Kong, So there has been a significant exodus. I think they figure used by the government is certainly well over one hundred and fifty thousand, maybe around tun or thousand people have left in the past year or so. It's obviously a still a place to do business. It's

obviously still the financial capital for China. Shanghai remains behind the capital border. As long as that remains to be the case, Hong Kong is business model won't change. So it does attract talent, it doesn't money, however, clearly, as I was saying at the beginning, at the beginning there it's losing a lot of its lustra as an international kind of place to go and do business on a freewheeling basis now being seen as complicated. It's part of

the China story. Singapore course doesn't have those complications. Dubai doesn't really have those complications per se. So there is money here. There will always be Chinese money here, Juliette, But you have to say, clearly, clearly, some of that is also being diverted to alternatives as well when it comes to the Singapore picture, or indeed anywhere else that might attract talent. You look at the likes of Dubai too. I mean, we had John Lee outline some of those

measures to attract talent about a month ago. What struck me though, was the fact that the visa was for a shorter period of time than Singapore's and it attracted a higher salary. So it's Hong Kong kind of just not shooting itself in the foot with these with these tougher measures to get talent visas. Yeah, I think, I mean, you know, if she stepped back to where the world was just a the beginning of this year, broadly speaking, much of Asia was under the same kind of lockdown

or these border restrictions. But these other countries like Australia and Singapore and elsewhere, they flick the switch and they reopened, and they told him, they told the world we've reopened.

Hong Kong hasn't done that. They've been kind of in First of all, it had a very difficult six months of the year to begin with, with the COVID outbreak and everything else and trying impose restrictions, and then of course their reopening has been quite staggered, and people don't really have the patience for that, and people even question

why that's effective to begin anyway. So then they come along with these measures and like you mentioned, and then the policy address, let's try and put some visas out there to attract some talent. But you have to say, is it really about visas? Is that the reason people aren't coming here, or is it just because of a of course, how you've handled a pandemic or the aftermath of the pandemic, and then be the whole China back

to up story. So Julia, people can argue about the pros and cons of the visa program to have enough for how it compares to other jurisdictions. But I think this is a bigger picture than visas. It's really fundamental about how Hong Kong sits between the US and China, and of course how Hong Kong runs his own affairs on the ground. To alright, talk out global audience through the shocker g d P print we got though from Hong Kong, and we know that that will turn around

when COVID zero eases. But it's a pretty die number. Now. It was a very bad read for Hong Kong's economy. It shows the depth of what's happening. You know, at the beginning of the year Juliet, there was a feeling that, oh, the Hong Kong economy suffering because of all of the restrictions so people aren't spending and shopping, so you could you could nut that out. But now, of course you've come beyond that. I mean, on the ground whatever for

all the restrictions in Hong Kong. On the ground, actually it's been wide open from months in terms of activities and people going around, et cetera. And yet the consumption side of things remains a weak. People aren't spending the way they used to. That's happening now at the same time that real estate prices are coming off. That's a key source of economic activity and investment in development for

the government. So that's coming off, and the port is starting to slow down because of the whole big trade boom stories coming off the ball, so that's losing ground. And then throw into the mixed of rising fed rates, which of course sucks capital out of Hong Kong. So now you're in a charity word. This isn't about COVID anymore. The COVID story you could argue with hitting the consumers, it's no longer just that. It's about a whole range

of global factors that is hammering Hong Kong's economy. And it goes to the point that Hong Kong hasn't been able to fickus whitch and say hey, we're reopen for business. It's back to normal. That point hasn't happened at all, all right, and negative four and a half percent, Brian telling me you're on here the Hong Kong Economy. Indo Karen,

thank you as always great reporting. Indo Karen is Bloomberg Chief Asia Economics correspondent with US in Hong Kong, where the Hong Kong Summit for global bankers began yesterday, with officials trying to convince the world the Chinese territory does remain the go to place in Asia for finance