Hong Kong must move with the times by making itself an efficient :: Economics

Hong Kong must range with the times by making itself an efficientplatform for Mainland financial intermediation.A number of journalists with specialised interests in financialdevelopments in Hong Kong asked for my interpretation of the carry onwith the times speech delivered by the regulator of the Peoples Bankof China, Zhou Xiaochuan at the Annual Dinner of the Hong KongAssociation of Banks on 30 September 2005. The trip with the times gossip was make by Governor Zhou in relation to maintaining thestatus of Hong Kong as an external financial centre.We should of course every(prenominal) move with the times and be alert to changestaking place nigh us if we do not wish to be left behind. Thiscomment has a universal application and is particularly important whentimes are changing rapidly. Those with the ability to anticipatechanges and prepare for them stand a much(prenominal) higher chance of success.Those that carry on doing the resembling things in the same old way willsimpl y be left behind. This is the reality.I obviously do not wish to quote others out of condition or to put wordsin others mouths, just as I do not wish anybody to do the same to me.But Governor Zhou delivered an important speech on a matter of commodiousimportance to Hong Kong - so important that it merited specialreference in Article 109 of the Basic Law - the maintenance of thestatus of Hong Kong as an planetary financial centre. And the HKMAdoes have certain indirect responsibilities for this subject, derivedfrom the Financial Secretarys authority in the Exchange FundOrdinance to use the Exchange Fund, with a scene to maintaining HongKong as an international financial centre, to maintain the stabilityand the integrity of the fiscal and financial systems of Hong Kong.So, for what it is worth, I will make an exception to my usual serve and offer my (undoubtedly subjective and possibly biased)interpretation. Since I dont speak from a agency of authority, mycomments will concentr ate more on how times are changing and less onhow we in Hong Kong should move with them.Governor Zhou made it abundantly clear that, in terms of the financialenvironment in which Hong Kong operates, times are changing andchanging fast. He made sextuplet important points. First, the savings rateon the Mainland is high by international standards and increasing, incontrast to a zero savings rate in the United States. I take this tomean that there is an exceedingly crowing amount (relative to GDP) ofdomestic savings on the Mainland to be mobilised and channelled into