We know that the Hong Kong protests have continued now for more than six months and there is no end in sight as well. Now, we are not going into politics but we are looking purely at the business side of things. Currently, Hong Kong is going through a recession due to these protests and the city is feared to lose its status as the financial hub if the protests keep on continuing. Therefore, people have already started to look at other countries which could potentially replace Hong Kong as the financial hub. We know that Singapore is already a great option for doing business and many big companies are already there.
However, Taiwan was pitched as a country which could replace Hong Kong as the financial hub including India. Now, FSC head says that Taiwan is unlikely to replace Hong Kong as the hub of finance and he has listed out his reasons too. Financial Supervisory Commission chairman Koo says we should understand why Hong Kong is a financial hub in the first place. According to Koo, Hong Kong’s common law system, low taxes, English fluency among factors contributing to its financial status.
In terms of Taiwan becoming a financial hub, there is a language barrier as well as the legal system is complicated and taxes are also higher. Also, Koo believes that Taiwan’s regulators have taken a cautious approach towards businesses in the past while Hong Kong hasn’t done the same. If the Taiwanese regulators remain cautious in the face of risks, it is unlikely to become the financial hub. Now, the best way for Taiwan, if it wants to become a financial hub, seems to be lowering taxes and educating its citizens of adopting English as their second language. While this is complex, it could be done and Taiwan can win the markets in this way.