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Hong Kong poised to become world's largest financial hub by 2017
By Wong Siew Ying | Posted: 03 December 2012 2031 hrs
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File photo: Hong Kong skyline. (AFP/Philippe Lopez)
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SINGAPORE: Asia's main financial centres will surpass their western counterparts as employers this decade.
And Hong Kong is poised to become the world's largest financial hub by 2017, according to a report published by the Institute of Chartered Accountants in England and Wales (ICAEW).
Centres like New York and London used to offer twice as many finance sector jobs than their Asian peers like Singapore and Hong Kong.
But Asian players are fast catching up, driven by a less onerous regulatory environment and growing critical mass.
The report showed there were 175,000 finance service sector jobs in Hong Kong before the financial crisis in 2007. This is expected to increase to 275,000 by 2017, surpassing New York and London.
It is estimated that New York will provide 250,000 jobs in the finance sector, down from 275,000 in 2007, while the corresponding figure for London will drop from 350,000 in 2007 to just under 250,000.
Meanwhile, finance sector jobs in Singapore are expected to double from more than 100,000 in 2007 to 200,000 by 2017.
The report showed the internationalisation of the Chinese Yuan will continue to support growth in Hong Kong, while Singapore will tap on its strength in the wealth management industry.
But this growth could pose challenges for policy-makers.
Douglas McWilliams, Chief Executive of The Centre for Economics and Business Research, said: "When you have rapid growth, you tend to get large inflows, and large inflows of currencies can be destabilising. The authorities have to change their exchange rate targets. In effect up until now, Singapore in particular has operated through an exchange rate target. It becomes less easy to do that in a period of rapid monetary inflows."
On the macroeconomic front, Mr McWilliams said the world economy is likely to record subdued growth in 2013.
And the two key risks on the horizon include political uncertainty in the Middle East and the fate of the Eurozone amid the lingering debt crisis.
However, in the event of a global recession, Mr McWilliams said Southeast Asian economies are in a position to boost growth through government expenditure.
Meanwhile, he adds that commodity prices could pose a risk to ASEAN economies, and a sharp slowdown in investment in the commodity sector could affect growth.
- CNA/de
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banks are willing to incur more cost to have office in HK rather than SG.
