Robust demand for financial talent as RMB business grows

中文

Despite the recent RMB devaluation and dynamic fluctuations of the China stock markets, the RMB business in Hong Kong is still recording steady growth. Together with the One Belt One Road policy, financial services institutes in Hong Kong have strong reason to be optimistic about the future.

Hong Kong as an RMB offshore hub

Mr Jack Cheung

“All of these present opportunities to Hong Kong as a financial hub, and no doubt they keep the sector healthy in terms of employment and talent development,” says Jack Cheung, CEO of the Treasury Market Association (TMA) at a recent HKUSPACE seminar. “It is evident that Hong Kong can secure its position as a leading financial city so long as we can maintain and foster the RMB business in Hong Kong as a major offshore RMB hub, providing services such as trading, lending, fixing and clearing, settlements, investment, etc.”

According to Cheung, there are increasingly more and more multinational corporations and China enterprises that have set up their own company treasury centres in Hong Kong to provide centralised treasury and transaction functions to the group. “This is partly because they use RMB as payment currencies and need our professional services, and mainly because we have a well established financial infrastructure, good legal system and regulations.”

Cheung adds that the talent pool is another important asset of Hong Kong's financial services sector. “You can’t build these things in one day; we have a strong foundation. Of course we will have challenges and threats, but we can always move on.”

To keep Hong Kong ahead as an RMB offshore hub, it is important to have authentic fixing and clearing figures even for the sector to make reference. “It is on what we have been working hard as an association and introduced the CHN Hibor Fixing in 2013. It not only provides a benchmark for loan facilities, but also facilitates the development of a variety of RMB interest rate products.  This helps the industry manage the interest rate risk of their RMB businesses,” Cheung says.

Mr Jimmy Jim

Jimmy Jim, Co-Head of Global Markets at ICBC Asia and Immediate Past President and Advocacy Chair, The Hong Kong Society of Financial Analyst, says: “If Hong Kong is to be the offshore RMB hub, the most important thing is to create the pool [of money] outside of China. And it’s what Hong Kong is doing. There is about 2.7 trillion transaction of RMB as a whole, and about 1.2 trillion - nearly 50 per cent of them - are in Hong Kong."

“If we want to stay competitive, we have to keep and create a pool like this, and make it grow. You can see that the government and industry are very keen to have RMB as a SDR (Special Drawing Right) currency in the International Monetary Fund. The reason is simple; in that case, it means that more people are using RMB, and so we have a market to serve those clients who are using RMB as a settlement currency,” Jim stresses.

Like many experts in the financial field, Jim believes that the One Belt One Road policy will be key to the growth of Hong Kong's financial sector. “One Belt One Road means a lot to HK, because it implies Hong Kong will be able to support the financing side of the project, be it in RMB or foreign currencies.” He adds that demand for financial services, including clearing and settlement, exchange and interbank, dim-sum bonds, syndicated loans, investment, securities custody and RMB banknotes businesses, will continue to grow."

“I agree with Jack that we need more transparent figures, as they are the foundation of any financial contracts,” says Jim. He is also confident about the role and development of Hong Kong's financial industry. “Take accountants for instance. You have a role to play: we are facing the western world and we have a very good track record. And to some extent our market is well regulated. In that sense we are qualified to be a very good offshore hub to serve our clients outside of China.”

Turn challenges into opportunities

As long as there’s opportunity, there’s challenge. “For instance, the free trade zones in Shanghai and Qianhai do present challenges to Hong Kong as an RMB offshore hub,” Jim says. “As a whole, they are important moves as it opens up the capital account of China. Some of my ex-colleagues quit their job and started up a business doing factoring business in Qianhai, where they are provided a ten-time leverage to do business. Which means with ten dollars you can do hundred dollars of financing business. This is something that we don’t have. Singapore also is a major competitor. Their government is actually giving a lot of incentives to the sector that can’t be found in Hong Kong. For instance in talent training: if you are going for an on-the-job training, the government gives you 50 per cent or even 100 per cent subsidy."

“That said, we still have our own strengths and opportunities: we have the market and policy transparency that the mainland doesn’t have. And even though the Singapore government has favourable policies to the sector, we have the support of China, which means a lot,” Jim says.

Cheung echoes that what makes Hong Kong unique as a financial hub is its “One Country Two System. For outsiders, we are China, but in China, we are using different system and law. This is very unique. With our good rule of law, free to open economy, experts in international prospective, our advantages will sustain in five to 10 years at least.”  

Dr Aidan Goddard

To Dr Aidan Goddard, CFO and COO of Asia Pacific at L’Occitane en Provence, Hong Kong and China will continue to be key business centres in the world. “The manufacturing sector in China is still very strong, and there are numerous European firms opening up offices and subsidiaries in China to manage operations as well as cash flow to minimise the exchange rate risk. There is a great demand for professionals with an international mindset and skill set, so I believe Hong Kong can play a crucial role in their development by ‘exporting’ talent,” Goddard says.