Business leaders' take, 25 years on after handover

Editor's note: These interviews, marking the 25th anniversary of Hong Kong's return to the motherland, explore the experiences of industry experts and organizations operating in the region over the past quarter-century.

An appointee to various HKSAR government advisory committees, including the Financial Services Development Council and the Financial Infrastructure Committee of the Hong Kong Monetary Authority, Joe Ngai is one of the best witnesses to Hong Kong's "before and after" story.

"I still remember, in 1997, a lot of people questioned if Hong Kong's financial market was going to be successful. They were worried about the market's stability and the Hong Kong-US dollar peg," Ngai recalled.

Twenty-five years later, the doubt proved to be "unnecessary and naive", Ngai said. Looking at the financial market's size today, compared with what it was before 1997, the difference is self-evident and astonishing, he said.

"People who left (the city) around 1997 have missed out on the golden 25 years of Hong Kong development. It's remarkable that Hong Kong has continued to prosper, with accelerated growth, which was realized on the back of the giant strides made by the (Chinese) mainland," Ngai said.

Furthermore, Hong Kong's pinnacle of prosperity is yet to come, Ngai said. "The best years of Hong Kong are ahead of us, rather than behind us."

The future of Hong Kong lies in and is intertwined with the entire Guangdong-Hong Kong-Macao Greater Bay Area, he said. To Ngai, the future laid out for the city is foreseeably rosy, but how the picture turns out depends heavily on how well Hong Kong uses its inherent advantages and lives up to the central government's expectations for the special administrative region.

In both the short and long term, Hong Kong should and will be the engine for the Greater Bay Area in a few areas, specifically, financial services, professional services, innovation and technology, and economic and enterprise globalization, Ngai said.

Currently, there are more than 1,600 global companies operating in Hong Kong with either their regional headquarters or offices, or just a local office, in the city and their parent companies based in Europe. If the companies with their origins in Hong Kong and their senior staff from Europe are included, the number is well above 2,000, according to Frederik Gollob.

It's indisputable that Hong Kong has a wealth of allure in its own right, drawing foreign companies to the city to establish their Asian presence, he said. But Hong Kong's unique and prominent position is only amplified by the Chinese mainland, where the breakneck pace of development in the past decades has stunned the world, he added.

The mainland's economic muscle and its gigantic market have constantly tempted overseas companies and investors to set up shop there. However, the discrepancies in regulations, laws and practices on the mainland could deter some businesses from entering the market, warned Gollob. Fortunately, Hong Kong is an entry point for overseas enterprises to access the Chinese mainland, reconciling the regulatory and cultural differences that could derail business collaboration and restrict business services, he said.

"I would say, for a large proportion of European companies operating in Hong Kong, the ability to do business with the mainland is one of their overriding benefits," Gollob said.

Since the Guangdong-Hong Kong-Macao Greater Bay Area development plan was unveiled, the European Chamber of Commerce has focused greater attention on the region. "To European countries, the Greater Bay Area is a very compelling concept and also a very important target market for offering our services and products from a Hong Kong perspective. We're very eager to explore the potential of the Greater Bay Area," said Gollob.

Joining the Shun Tak Group in 1995 as executive director and being appointed managing director in 1999, Ho is ideally placed to chart how the return of Hong Kong to the motherland transformed the city for the better, especially how it moved the needle to its tourism and hospitality sector.

Reminiscing about her early forays into public and corporate relations as well as entrepreneurial investments in the early 1990s, Ho said many Hong Kong enterprises she worked for were upbeat about and eagerly anticipated the establishment of the HKSAR.

Fondly recalling a conversation with her father Stanley Ho Hung-sun, the legendary businessman and casino tycoon, over a family dinner, Pansy Ho said: "I asked my father, 'What about our (Shun Tak) family business? What have we planned ahead to embrace the handover?'" Her father responded, "We're a patriotic family and our business has already built connections with the mainland."

"But is that enough?" quizzed Pansy Ho. This provided food for thought over the conglomerate's vision and strategies. She believes that her father was primed mentally, organizationally, structurally and strategically for the exceptional opportunities that were about to be unfurled.

Hong Kong's past 25 years have been blessed with landmark achievements, putting the SAR on the international map. The introduction of the Individual Visit Scheme in 2003 was groundbreaking, adding flourish to the city's tourism and hospitality sector, said Ho.

Looking ahead, Ho is hopeful of seeing more cross-border exchanges in "people". By "people", she means "talent", "manpower "and "trainers" or veteran practitioners across the board, tourism and hospitality sector included, who can raise the practice standards of cultural facilities as well as tourism and catering services.

With the necessary space and infrastructure in place, Hong Kong will be better positioned to develop the innovation and technology sector as well as accelerate the progress of its economy in the coming decades, said Sunny Chai Ngai-chiu.

The Hong Kong Science Park has intensified its efforts to reinvigorate the manufacturing sector. Chai said that the HKSTP aims to build a solid infrastructure for innovation and technology development, from research to commercialization and manufacturing. The HKSTP unveiled the Advanced Manufacturing Centre at Tsang Kwan O InnoPark in April. The 2.71-hectare manufacturing center is set to provide services for logistics, warehousing, prototyping, low-volume assembly and clean-room-enabled space.

The manufacturing sector used to be one of Hong Kong's economic pillars in the 1970s and early '80s. However, the city started putting an emphasis on the services sector, and an increasing number of manufacturers relocated their production lines to the north－the Chinese mainland－to take advantage of more-affordable labor and land.

To address the significance of the industrial sector in diversifying the economy and GDP growth, the new-term Hong Kong administration, led by Chief Executive John Lee Ka-chiu, is reorganizing the Innovation and Technology Bureau into the Innovation, Technology and Industry Bureau effective July 1.

Chai said the HKSTP established eight guiding principles to underpin its reindustrialization target: "output, investment in factories, high-skilled employment creation, product specifications, advanced processes, research and development activities and capabilities, local consumption for stable supply chain and sustainability in terms of business, environment, or resources".

Hong Kong is expected to play a more important role as a bridge linking the mainland and overseas economies, Eddie Yue Wai-man said.

To realize that goal, strengthening connectivity with the mainland, developing financial technology as well as green finance are the main directions in which the city's future financial development will move. "They will offer Hong Kong's financial industries great opportunities while enhancing the city's status as an international financial hub," Yue noted.

During the past few years, the HKMA has worked together with a number of agencies on a research program named Multiple Central Bank Digital Currency Bridge, or mBridge, which aims to facilitate real-time cross-border payments across different jurisdictions.

Yue revealed that within this year, the HKMA will launch a pilot trade settlement system, as one of about 15 applications of mBridge, to address the issues of cross-border payments.

Meanwhile, Yue noted that enhancing the infrastructure of the whole system is key to strengthening the link between the special administrative region and the mainland.

The authority plans to improve and upgrade the Central Moneymarkets Unit, a system that provides multi-currency settlement, clearing and custodian services for debt securities, with the aim of making it an international bond settlement platform.

The improved CMU system is expected to invigorate the offshore renminbi market in Hong Kong by promoting its liquidity, thereby enhancing the city's position as an international offshore renminbi center, said Yue, adding that it might also benefit the acceleration of the internationalization of the renminbi.