Wealth Swings to Hong Kong

As New York gained from Europe’s problems after World War I, so Hong Kong will capitalize from the current financial crisis slamming New York. Los Angeles Times correspondent Don Lee writes about how world finance is shifting to Hong Kong:

With the U.S. and Europe worse off than others, there's little doubt that more capital and talent will swing toward Asia. And few places look as well positioned as Hong Kong to take advantage of that. “[T]here are three great listening posts: London, New York and Hong Kong," says Donald Straszheim, former global chief economist at Merrill Lynch in New York, [and] "Hong Kong is increasingly becoming globally important.”

The latest financial crisis has Western governments promising tougher regulation of banks and trading houses. . . "People want government to do more, but not to the extreme of the U.S., where the government takes control of everything," says Man Cheuk Fei, chief editor of Hong Kong Economic Journal. "Hong Kong senior officials argue that this is a golden opportunity to build one or two investment banks. . . . They can compete with the U.S. in the future."

Thanks to China, Hong Kong has surpassed New York in the number of initial public offerings in recent years. As much as 70% of Hong Kong's economic growth now depends on the mainland, says Donald Lam, assistant general manager at Hang Seng Bank, one of this city's largest.

David Dodwell, a British native who has lived here 20 years, says Hong Kong should come out stronger from the global economic turmoil, which he believes "will be the tipping point marking the end of U.S. hegemonic power." China "is going to be an increasingly powerful locomotive for the global economy," he says.