Hong Kong: Far from Over

I was in Hong Kong last week and I was asked more than once if I share the same sentiment with some critics that the city as an international financial hub is “over”. To be honest, I was slightly taken aback by the amount of pessimism currently surrounding Hong Kong. Considering I was born just before World War II and grew up during the Great Depression, it’s not hard to see why I’m an eternal optimist.

My views on Hong Kong have remained largely unchanged from when I first set foot in the city in the 1960s

From an investment standpoint, it’s never a good idea to write off the potential of any city or country. For me, as a fund manager who is constantly on the lookout for undervalued stocks to invest in, no market is ever really out of the game.

Having said that, as with anything in life, if you don’t move with the times, you risk getting left behind. In dropping its colonial baggage, Hong Kong must reinvent itself and make better use of the strengths it has cultivated over the years.

I still vividly remember moving to Hong Kong in the 1960s to set up my own consulting firm as a business rookie. It was Hong Kong and its incredible business community that showed me the ropes of running a business. The entrepreneurial spirit, the resilience, and the relentless drive to succeed were the hallmarks of the business environment there.

Even today, my views on Hong Kong remain largely unchanged. Last week, I had the opportunity to meet with several individuals from the business circle, and it was clear to me that the fundamental spirit of Hong Kong's business environment is still very much alive. On the ground, I see the same hustle, the same ambition, and the same determination to succeed.

At a dinner organized by Chartwell Institute, I met with family offices, investors and business leaders in Hong Kong

I also met with Hong Kong Stock Exchange’s new CEO Bonnie Chan, who highlighted that Hong Kong remains an important gateway into China for those who can‘t access the mainland stock market directly

Nonetheless, I do see changes on the political front and in population dynamics. I am well aware of the migration out of Hong Kong since the social unrest in 2019, followed by strict Covid restrictions. At the same time, there’s been more mainland Chinese people moving into Hong Kong. As the integration between China and Hong Kong progresses, it’s clear that Hong Kong is experiencing a shift in its talent pool. However, does this necessarily spell the demise of Hong Kong? Who is to say this isn't an opportunity for Hong Kong to evolve and thrive in new ways?

Enjoyed my conversation with Zhang Yichen, chairman and CEO of CITIC Capital Holdings, at the Caixin Summer Summit in Hong Kong
I love this photo from a media briefing held at the Hong Kong office of Chartwell Capital, where I serve as a strategic advisor. The Chinese characters behind me symbolize the concept of "leaving something on the table” in business and in life

Ancient Chinese wisdom often emphasizes that opportunities can arise from challenging situations. This idea is epitomized by the intensifying AI and semiconductor rivalry between the US and China. With the US imposing increasing restrictions on China's AI growth, Xi Jinping's government has responded by accelerating efforts to develop its own semiconductor industry. In May, China reportedly established a US$47 billion semiconductor fund aiming to achieve self-sufficiency in chipmaking.

The jury is still out on whether China can surpass the US in the ongoing tech race. In the meantime, I believe Hong Kong would stand to benefit significantly by embracing technology and AI to align with China's ambitious plans and to solidify its role as China’s bridge to the world.

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