Chan touts 'great potential returns' from I&T push

Caroline Zheng and Bloomberg

Hong Kong still offers enormous investment opportunities with "great potential returns" despite uncertainties, including those related to new technologies and connections with the Middle East, Financial Secretary Paul Chan Mo-po said yesterday.

Speaking on the final day of the Global Financial Leaders' Investment Summit, Chan said Hong Kong viewed innovation and technology as a core engine of growth, expecting the city will give birth to more unicorns, referring to startups valued over US$1 billion (HK$7.8 billion), in the next five to 10 years.

For example, in the artificial intelligence sector, Chan said many mainland AI firms are keen to come to Hong Kong thanks to unfettered access to international data, and so would many international AI companies because they will be able to access mainland data here. The city is actively working towards cross-boundary data flow within the Greater Bay Area, Chan noted.

The financial hub is also actively collaborating with the Middle East and other regions, with Asia's first-ever exchange-traded fund investing in Saudi Arabia to be listed in the city soon, Chan added.

Julia Leung Fung-yee, chief executive of the Securities and Futures Commission, told summit participants that Hong Kong's financial regulators only allow the responsible use of AI as it poses potential threats. The SFC is also thinking of ways to mitigate those risks, Leung added.

Wall Street's elite gathered for a second day at the summit to discuss topics including investing in China.

China is experiencing a massive drive to diversify retirement savings away from real estate and deposits to other investments that are more capital-markets driven, so this is a big opportunity for BlackRock, said senior managing director Mark Wiedman, the firm's head of global client business.

"Cyclically, this is a difficult time in China," Wiedman said on a panel about the macro landscape. "People talk about China like US-China tensions are the driver. It's domestic policies, domestic investments that are the long-term opportunities in China."

Wiedman believes the role of the capital market will become even more important in China and its market size will jump from second in the world to the top.

Capital Group's new president and chief executive Mike Gitlin said China is undergoing an economic transition that will take decades and investors should "lean into" areas that can benefit the most from government policies.

Paul Marshall, the co-founder of British hedge fund major Marshall Wace, said China has been the world's best-performing market for many years and its liquidity is second only to that of the United States.

Marshall also believes Hong Kong's legal system can still attract talent to settle in the city.

Eddie Yue Wai-man, chief executive of the Hong Kong Monetary Authority which hosted the event, said the attendance of nearly 100 leaders from the world's top financial institutions shows their confidence in Hong Kong.

But organizers are not sure if the summit will be held again next year and will collect feedback from participants first, said Yue.

caroline.zheng@singtaonewscorp.com