HSBC Holdings (0005), which is committed to further development in China, has vowed to support Shanghai's bid to become a financial center like Hong Kong."I sincerely hope that Shanghai will become a financial center, as China is able to have two centers, given its size," Vincent Cheng Hoi-chuen, chairman of HSBC's Asia-Pacific unit, said yesterday.
Cheng said that competition in the banking sector between Hong Kong and Shanghai will only emerge in the capital market, and the two places should collaborate to sustain their development.
"There should be enough capacity for companies to list in both or either market at the same time, despite more and more companies planning to go public in the capital market," Cheng said.
He added the HSBC group will continue to commit resources to the mainland, tapping the country's growth potential.
The group's latest venture is HSBC Life Insurance, which started operations yesterday in Shanghai. The firm is a 50-50 joint venture with Beijing-based National Trust.
The new insurer, which currently employs 180 people, plans to hire 320 more staff within a year, said chief executive Terry Lo Kin-wing.
The company will seek operating licenses for other mainland cities in phases, with Beijing and Guangzhou topping the list, Lo said.
Cheng said HSBC Life has registered capital of 500 million yuan (HK$567 million), and HSBC could raise its stake in the firm if necessary.
The firm will mainly sell its products through the branch network of HSBC, Hang Seng Bank (0011) and Bank of Communications (3328), and perhaps some other mainland banks.
"We are exploring possibilities with Ping An Insurance (2318)," said David Fried, HSBC Insurance chairman for Asia-Pacific.
Cheng said HSBC China is willing to increase its capital adequacy level and support its partners if the mainland banking regulator requires banks to do so.
