Hong Kong fell three slots to sixth place in Z/Yen Group’s newly released rankings of global financial centres on Friday, overtaken by Tokyo, Shanghai and Singapore.
New York took the top spot in the index, followed by London, according to the Global Financial Centres Index (GFCI) report, which is published by Z/Yen Group in partnership with the Shenzhen-based China Development Institute.
The drop in Hong Kong’s global competitiveness came as the city has been in the grip of social unrest since June, when anti-government protests triggered by the now-withdrawn extradition bill erupted.
The twice-yearly index, released every March and September, rates 108 financial centres based on assessments from 5,064 professionals via an online questionnaire and backed by quantitative data.
Hong Kong was ranked sixth in the index, dropping three places from September, with Tokyo moving up three places to rank third, and Shanghai and Singapore taking fourth and fifth, respectively.
One anonymous respondent from Hong Kong, described as head of legal for an investment management firm, commented: “Given the social unrest, brain drain would be expected and supply and demand for skilled labour would be diminished.”
The report said Asia-Pacific centres had a somewhat downbeat performance overall with 15 centres falling in the rankings and just 10 rising.
“This appears to reflect levels of confidence in the stability of Asian centres and in their approach to sustainable finance, which appears to be growing in its effect on the overall rating of centres,” it said.
“Uncertainty about trade, [and] the economic impact of the Covid-19 pandemic has led to much more volatility in the index results than is normal,” Michael Mainelli, Z/Yen Group’s executive chairman, said in a statement. “Competition remains fierce among financial centers.”
Following the release of the updated index, a statement attributed to a government spokesman pledged to address the perception issues they believe led to the drop and step up the city’s promotional efforts.
“As we see it, the unprecedented challenges arising from local social incidents in Hong Kong in the past year, and how these were perceived overseas, might have affected Hong Kong’s score in the online questionnaire and the overall ranking,” the spokesman said.
“Looking ahead, we will strive to address the perception issues and clarify doubts. We will step up our promotional efforts and put across the message that Hong Kong remains a leading international financial centre and the gateway to the mainland Chinese market,” he emphasised.
The statement went on to say the government would continue to sharpen the competitive edges of Hong Kong and develop the city into a broader and deeper fundraising platform leveraging the opportunities provided by the Greater Bay Area and the Belt and Road Initiative.