City of London Corporation report on Asian Financial Centres

15 October 2008

It is likely that a number of Asian financial centres will become increasingly important globally, the report says. The centre of gravity in the international economy is increasingly shifting towards Asia and financial centres here are set to grow.

The report says it is likely that a number of Asian financial centres will become increasingly important globally, each with unique specialisations. It focuses on three centres: Hong Kong SAR, Tokyo and Singapore. Given the current market uncertainty the centre of gravity in the international economy is increasingly shifting towards Asia and financial centres here are set to grow, the report says.

 

The study says that Asian financial centres will play a greater part in the global financial industry and this will bring a range of challenges and opportunities for the world’s leading financial centres of London and New York. It also highlights the fact that the ability of UK-based financial institutions to maximise their business relationships within Asia is of vital importance.

 

According to the report, Hong Kong SAR has proven a surprisingly resilient international financial centre for a burgeoning China and remains the pre-eminent portfolio investment centre in Asia as well as the region’s dominant centre for institutional investment. However, the question of whether Hong Kong SAR’s position is a sustainable one will depend entirely on its long-term relationship with the Mainland, according to those surveyed.

 

The report says that Tokyo retains strong fundamentals, but 15 years of slow growth have stalled domestically-driven development, and Tokyo appears to have lost some of its competitive advantages. It is also perceived to lack the "soft" infrastructure required of a genuinely international centre.

 

The report says that Singapore has been particularly successful in attracting a growing portfolio of wealth under management from around the world, but that it is confronting a number of structural constraints to its development as a leading financial centre in the region. The long-term threat to Singapore’s status as an international financial centre remains its lack of indigenous hinterland to underpin the growth of its financial services sector.

 

Press release

Report

Report summary

 

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