The mainland needs Hong Kong to attract more international capital into micro enterprises, according to Charles Li Xiaojia, the former chief executive of Hong Kong Exchanges and Clearing.
Speaking at the forum held by the Our Hong Kong Foundation think tank, Li also said the next trend in financial development will be towards a cashless or digital world.
In the digitalized generation, data is a vital resource and he believed that capital will flow into micro-enterprises.
However, due to the relatively high risk of investing in micro-enterprises, it is not suitable to use money linked to implicit sovereign guarantees such as bank funds as the source of investment.
Instead, global investment funds should be the first to enter micro-enterprises, and if the mainland wants to attract international capital, it needs Hong Kong, he said.
While investing in a single micro-enterprise is risky, large scale investment in a group of micro-enterprises is a different thing, Li said.
Investors should count the survival rate of the group investment instead of the risk of only one single micro-enterprise and Hong Kong, could act as a middleman between the East and West, he said.
Hong Kong Monetary Authority chief executive Eddie Yue meanwhile said that Hong Kong’s unique advantage is that it is the only Chinese city connected to the international financial market.
He expects that under the southbound bond connect, the flow of funds from the mainland to the international market will continue to increase, and asset management-related industries will usher in new opportunities.
Yue said that technology has become indispensable to the financial world, and the most important task of the HKMA is to assist all banks in using technology.