Hong Kong is ‘place where you can make money’, Paul Chan tells Silicon Valley

“Apart from starting a business within 24 hours, easy access to capital, excellent banking services, and what’s more, law and order – we are a safe city,” Chan said. “For education, we are excellent.”

Chan earlier pledged to dispel “negative narratives” that might be keeping investors away.

“It is basically a place where you can make money, where you can save and build your wealth,” he said.

Meeting representatives from Silicon Valley start-ups, venture capital funds and private equity firms on Wednesday (US time), Chan said Hong Kong had been “through four difficult years” because of social unrest in 2019 followed by the pandemic, but the city had fully reopened and welcomed business.

He pointed to a number of the city’s economic strengths, including gross domestic product growth of 3.2 per cent, a low unemployment rate of 2.8 per cent and inflation at about 2 per cent.

Chan said property prices had dropped by about 17 per cent since they hit record highs in September 2021, but suggested the adjustment was “natural”.

“Remember our property prices were extremely high, so they were still high even after going down by 17 per cent,” he added. “It doesn’t pose any challenge to our banking system or the confidence of people in our economy, because there has been an orderly adjustment with a low transaction level.

“Given the high interest rates and the unfavourable economic situation in the past few years and the geopolitical tensions, that adjustment is natural. The outlook, I would say, is stable.”

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The financial secretary added the stock market was “kind of a roller coaster”, having fallen by about 14 per cent since the end of last year, but overall it was functioning in an orderly manner.

He said that a task force had been formed to look at the stock market’s liquidity and that the government was in the process of implementing some recommendations, including enhancing the city’s listing regime and mechanism.

Chan added that could make it easier for mainland Chinese capital to come to Hong Kong, and for more international issuers and quality companies from the Middle East, Southeast Asia and Europe to choose the city for listings.

“I think both the property market and the stock market will be a lot more positive. But at the moment, [the situation] is stable and orderly,” he said.

Chan told the audience that the city had two main engines of growth, financial services and innovation and technology, with the latter to focus on areas including artificial intelligence and data analytics, life and health sciences, as well as fintech.

He said, although Hong Kong had been a successful international financial centre for quite some time, its economic structure needed to be diversified so the city could better weather different cycles and be more receptive to external changes.

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A new growth engine in the technology sector could provide more quality job opportunities for residents, he added.

“For people not interested in becoming a banker or venture capital or private equity investor, or becoming an accountant or a lawyer, they can choose to have an excellent career in the technology sector,” he said.

Chan also took the opportunity to tell attendees that the “one country, two systems” governing principle would be there for the long term, and the city operated under different economic and legal systems that distinguished it from the rest of China.

The financial secretary also highlighted Hong Kong’s favourable tax regime and education system, noting the city was home to 50 international schools that foreign businesspeople could enrol their children in.

“One more: if you like good food, we have over 200 Michelin-recommended restaurants. And we don’t tax wine, and are in fact a wine trading hub,” he added.

Chan also visited a biotech start-up in Silicon Valley that focuses on combining artificial intelligence and health technology data to enhance preliminary research efficiency and discoveries in areas such as genetic engineering and medicine R&D.

The government said in a press release the company was actively considering establishing a research and development centre and regional headquarters in Hong Kong to develop its business in Asia.

In the evening, Chan attended a welcome reception for the Apec economic leaders’ meeting.

Chan is representing Chief Executive John Lee Ka-chiu, who is under US sanctions and said “scheduling issues” prevented him from attending the Asia-Pacific Economic Cooperation summit even though he received a personal invitation.

The finance chief joined the nation’s Apec delegation and on Tuesday greeted Chinese President Xi Jinping, who later met his US counterpart Joe Biden.