Hong Kong's International Financial Centre: Retrospect and Prospect

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Percentage Share of Total Employment The Four Key Industries of Contemporary Hong Kong Share of total employment (%) 2004 2005 2006 2007 2008 (1) Financial services 5.2 5.4 5.5 5.5 5.9 Banking 2.2 2.3 2.4 2.5 2.7 Insurance 1.2 1.3 1.2 1.2 1.2 Other financial services (e.g. stock brokerage, asset management, finance leasing and investment and holding companies) 1.7 1.8 1.8 1.8 2.0 (2) Tourism 4.7 4.9 5.2 5.6 5.6 (A) Inbound 3.9 4.1 4.2 4.6 4.7 (B) Outbound 0.8 0.8 0.9 1.0 0.9 (3) Trading and Logistics 24.3 24.7 24.6 24.2 23.6 (A) Trading 18.3 18.7 18.5 18.2 17.7 (B) Logistics 5.9 6.0 6.2 6.0 5.9 (4) Professional Services and Other Producer Services 11.0 11.1 11.3 11.7 12.1 (A) Professional services 4.0 4.1 4.2 4.4 4.6 Legal, accounting and auditing services 1.1 1.1 1.2 1.2 1.3 Architectural, surveying, project engineering services; engineering and technical services; and business management and consultancy services 1.7 1.7 1.8 1.8 1.9 Other professional services (e.g. information technology related services, advertising services) 1.3 1.3 1.3 1.3 1.4 (B) Other producer services * 7.0 7.0 7.1 7.3 7.4 Four Key Industries = (1)+(2)+(3)+(4) 45.1 46.1 46.6 46.9 47.2 In striking contrast to the industrial economy of Hong Kong in the era before China’s opening in the late 1970s, the four key industries of the present are all in the service sector. To be sure, the main generator of employment, trading and logistics, is still linked to a manufacturing base. But that base is now on the Mainland. Finance and professional services generate less employment, but taken together they generate roughly the same economic value in GDP terms. Another way to assess the importance of both industries as they have changed over time is to examine available data for service exports. Of late, and certainly since recovery from the Asian crisis of the late 1990s, service exports from Hong Kong have been growing at a pace in excess of 10% per annum. Since 2003, exports of financial services have grown much faster than exports from any other service sector. 20
____________________________________________________________________ Growth in Service Exports from Hong Kong by Sector Source: HKMA, Working Paper 04/2008, Chart 4. _________________________________________________________________________ China is the single largest importer of services from Hong Kong, followed by the United States. If the Mainland economy doubles in size over the next decade, service exports from Hong Kong will likely account for 50% of its GDP. 14 Although there is no reason to expect financial services to shrink in terms of its relative share of this activity, there is every reason to expect traditional banking services to shrink relative to other kinds of financial services, including asset management and securities trading. _________________________________________________________________________ Business Receipts of Banking and Non-Bank Financial Services Source: HKMA, Working Paper 04/2008, Chart 12. _________________________________________________________________________ 14 Frank Leung et al., “Service Exports? The Next Engine of Growth for Hong Kong?” Working Paper 04/2008, Hong Kong Monetary Authority, 21 April 2008, p. 3. 21
Page 1 and 2: Hong Kong’s International Financi
Page 5 and 6: however, and widespread allegations
Page 9 and 10: 2. Analytical Background Foundation
Page 11 and 12: finance. 3 Not by coincidence is it
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Page 17 and 18: Value Added The Four Key Industries
Page 19: Employment Numbers The Four Key Ind
Page 23 and 24: The legacy of past investments is a
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Page 33 and 34: Both policy paths led to sound and
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Page 41 and 42: Kong’s role as a financial centre
Page 43 and 44: In this regard, it is entirely poss
Page 45 and 46: By 2010, 145 banks operated as lice
Page 47 and 48: Given its strategic location and th
Page 49 and 50: exceeded US$50 billion. With 78 com
Page 51 and 52: mismanaged. In the wake of the cris
Page 53 and 54: expanded, volumes grew by 400% over
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Page 57 and 58: insurers include AIA (Bermuda), Man
Page 59 and 60: 7. The Changing Role of Government
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Page 63 and 64: focus on the other financial policy
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Page 67 and 68: contribute to dilemmas of various k
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First, governments across the advan
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segmentation, slowed down but not s
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the vital importance of monetary st
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9. Finance, Autonomy, and the Achie
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they have always done so. For compe
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they collectively ‘solve’ the m
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policies. With such images and such
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such a context, the range of financ
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surveys of universities and their r
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Hong Kong's International Financial Centre: Retrospect and Prospect

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