China Steals the Show at the Asian Financial Forum
The 2018 Asian Financial Forum (Jan 15-16 in Hong Kong) delivered its usual mix of policy heavyweights and leading voices in the corporate financial world. Much of what was said from behind the podium concerned China — it’s economic policy, growing leadership role, and what companies are doing from and inside China.
India stayed away from this year’s conference — reportedly because it is keeping its powder dry for the World Economic Forum in Davos later this month. That left the stage wide open for China, with host Hong Kong playing a strong supporting role. The conference drew many influential leaders, from Hong Kong SAR Chief Executive Carrie Lam to Takehiko Nakao, president of the Asian Development Bank and the CEOs of HSBC, CITIC Capital Holdings and several other large financial institutions.
Here are some of key takeaways from the two day gathering:
- China is still at the top of the agenda for policy makers and bankers, both in what they see as opportunities and in areas where they wish China and its companies would do more.
We had IMF First Deputy Managing Director David Lipton saying that China should be willing to loosen trade and investment restrictions if it seeks to play a leading role in globalization. He pointed to the restrictions China places on trade and investment and cautioned leaders to pay more attention to protecting intellectual property rights. We also heard a board member from Germany’s central bank say that it has decided to include the yuan in its foreign exchange reserves for the first time — another signal of China’s influence.
- For all the talk, and evidence, of the eroding border between Hong Kong and Mainland China in terms of finance and business, Hong Kong is still carving out its own unique space in global business.
HKEx recently announced a listing reform plan that will allow biotech firms without revenue and other large new economy companies with dual-class shares to list in Hong Kong, and HKEx said at the conference that those listings will begin by the end of June. Meanwhile, Jiang Yang, vice chairman of the China Securities Regulatory Commission, told the conference that China will support only those financial technology businesses that benefit the real economy as the government becomes more cautious about the financial risks encouraged by the fast-growing sector. The People’s Bank of China last September outlawed initial coin offerings, a means of crowdfunding using cryptocurrency, followed by a halt of virtual currency trading on domestic exchanges.
- Fintech, robotics and artificial intelligence are now firmly implanted in business strategy, taking their rightful place at multi-national meetings alongside regulatory reform and corporate governance.
Professor Daniela Rus, the director of the Computer Science and Artificial Intelligence Laboratory and professor of Electrical Engineering and Computer Science at the Massachusetts Institute of Technology spoke about the latest developments in artificial intelligence and robotics and the impact these technologies may have on the finance and business industries, while JP Nicols, managing director of FinTech Forge and Chairman of NextMoney.org, elaborated on how financial enterprises and businesses can leverage innovation to succeed and to stay ahead in the rapidly changing global market.
- Policy makers continue to sell China’s Belt and Road Initiative, and those corporates that get on board stand to reap big benefits.
Hong Kong SAR Chief Executive Carrie Lam said the HKSAR’s economy is riding high, thanks to the innovation and opportunities that come from the opening up of China and its trade route scheme. China Development Bank has committed US$250 billion in loans to the trade plan, and had already extended US$110 billion in loans to projects along the reimagined trade route by the end of 2017.