Citigroup, Standard Chartered and HSBC bet that new opportunities in mainland China will outweigh damage to Hong Kong’s status as a global financial centre.
China’s introduction of a tough new Hong Kong security law in June 2020 led to widespread fears that the city would lose its autonomy and status as a leading financial centre.
As the law was introduced during the Covid-19 pandemic, it may be premature to draw too many conclusions about its impact on foreign financial services investment. However, fDi Markets data highlights that while the number of projects has fallen significantly — 19 projects in 2020 plus 10 this year (to end-May) compared with 72 projects in 2010 and 85 in 2011 — the amount of investment and number of jobs created looks set to rise this year.
Driving this trend are global banks such as Citigroup, Standard Chartered and HSBC, which are betting that closer ties with Beijing will improve access to wealth management clients and other opportunities in mainland China, outweighing any damage to Hong Kong’s status as a global financial centre.
This year has seen $1.2bn invested in the first five months 2021, which already comfortably outstrips the full-year totals in 2020 ($440m) and 2019 ($939m).
In March, US-based Citigroup announced plans to expand its operations in Hong Kong by hiring up to 1700 new staff as part of efforts to develop business in the Guangdong-Hong Kong-Macau Greater Bay Area.
In April, Standard Chartered announced plans to expand its retail and wealth management operations in Hong Kong. The UK-based bank plans to hire 400 new staff and invest $26m by 2024 to revamp its branches in the city. In the same month, HSBC opened a new family office in Hong Kong.
