The finance sector of Hong Kong is one of the primary contributors to the economic growth and development of Hong Kong. It has deservedly gained a reputation as one of the world’s leading locations for the conducting of business activities within the financial sector, thus making it a regional and global financial hub which has been able to attract financial activity from all over the world.
There are several reasons why the financial sector of Hong Kong has been able to attain this enviable status. Among these reasons are the high level of legal regulation which is imposed on the financial sector of Hong Kong, its connections to mainland China, the high degree of ease of doing business which exists there, and its openness to contributions made by foreign businesses and their owners. Thus, one would expect that Hong Kong’s financial sector would find it easy to develop as rapidly and exponentially as it has.
However, all of these advantages mentioned does not mean that there are no difficulties awaiting those who enter the finance sector of Hong Kong. Just as is true anywhere else in the world, there are difficulties with which anyone who enters this industry must contend before achieving success within the sector.
One of the primary challenges which anyone who enters Hong Kong’s finance sector must face is that of the high level of competition which is posed by other leading financial hubs of the Asia-Pacific region. Cities such as Tokyo, Shanghai, and Singapore, among others, have also established themselves as regional and international powerhouses in the global financial scene and therefore serve as direct competition to the financial sector of Hong Kong and everyone working within it. Furthermore, the Asia-Pacific region is the region of the world which consistently posts the highest rate of economic growth. Therefore, the high level of competition which exists in Hong Kong’s financial sector could potentially dissuade a person who is not prepared to handle it from entering the industry.
Civil unrest in Hong Kong
Another factor which poses difficulty to those who enter the financial sector of Hong Kong is related to recent events which have taken place there. In recent times, protests opposing the government of China and promoting democracy in Hong Kong have become widespread across the area as the protesters have intensified the pursuit of the rights of the people who live in Hong Kong today. These protests have gone on to have an impact on Hong Kong’s economy and therefore its financial sector as well. Many international financial conferences and other events which would ordinarily be held in Hong Kong are no longer to be held there. The current situation has also increased the difficulty of the conducting and completion of financial deals in Hong Kong.
High operational costs
Another challenge which is faced by Hong Kong’s financial sector is that of the high operational costs which exist in Hong Kong. Many experts have stated that it is of much importance that the banks and other financial institutions of Hong Kong must engage in suitable and effective cost reduction initiatives in order to maximize their overall profitability and thus continue to strengthen Hong Kong’s position in the international financial scene. These initiatives are intended to cause the financial institutions of Hong Kong to grow in a sustainable manner and not place them in a position in which they would be likely to experience financial failure after a period of rapid and steep growth.
Despite these challenges, Hong Kong is nevertheless a very suitable location in which anyone may conduct business operations. Should you be interested in starting a business within Hong Kong’s lucrative financial sector in Hong Kong, we at Paul Hype Page & Co will provide suitable assistance. Our incorporation team will work with you so that your Hong Kong-based company will be fully prepared for operation as soon as possible.