Bargain sale, collapsed deal reflect Hong Kong’s struggling retail property market

Michael Mainelli, the creator of the Global Financial Centres Index (GFCI), predicts that Hong Kong will soon become the world's leading financial hub, surpassing both London and New York. Mainelli, chairman of the London-based Z/Yen Group, believes the narrowing gap between Hong Kong and these traditional financial centers will soon be bridged.

According to the March edition of the GFCI, Hong Kong ranks third behind London and New York, with the next edition due for release later this month. Mainelli attributes the race's tightening to a structural shift towards Asia, which now accounts for approximately 40% of global finance. He states that Hong Kong's resilience is rooted in its legal predictability, low tax burden, and common law system, which facilitates contract signing and enforcement.

The city's fiscal discipline, with state expenditure at 15% of GDP, compared to 19% in Singapore and over 40% in Europe, also provides a significant advantage. Mainelli warns that frequent policy shifts, as seen in Singapore's recent tax-incentive announcements, could undermine business confidence. He emphasizes that predictability is the most critical regulatory demand for businesses, outweighing speed, flexibility, and overall quality.

While Mainelli dismisses concerns regarding mainland Chinese hubs like Shanghai and Shenzhen overtaking Hong Kong, he highlights the city's investments in gold-trading infrastructure and a central clearing and settlement system that will bolster its position. The main long-term challenge for Hong Kong, according to Mainelli, is balancing mainland integration with maintaining global accessibility.

He insists that the city's success depends on preserving openness and treating all businesses fairly, underlining that the "one country, two systems" framework remains highly effective as long as commercial openness is maintained.