The Challenge And Development Of Hong Kong As An International Financial Centre Competitiveness Analysis

Financial service is one of our most important and promising industries. It is of paramount importance to preserve our competitiveness in the region so as to provide the crucial impetus for Hong Kong's continued development. In today's ultra-competitive global financial market environment, major financial centers are eagerly defending their position and trying to overtake other competitors through enhancing their competitiveness. The most important strategic issue facing Hong Kong as a leading international financial centre, how do we position Hong Kong in an increasingly competitive market place?Back in November 2005, the City of London conducted a study of global financial centers and how London ranked among them. The study concluded that London and New York were the only two genuinely global financial centers. It is interesting to note also that while there was no clear leader among the Asian centers in the 2005 report. Globalization and technology have revolutionized the marketplace, together; these developments have had a significant impact on the competitiveness of markets around the world. Even the largest markets - such as New York and London - find it necessary to reassess their position on the global stage and competitiveness.The recent development of Hong Kong as an international financial center has largely been related to Mainland's international financial intermediation activities. The rise of Mainland China represents a potentially important push factor for the demand for financial services exports from Hong Kong, and hence its status as an IFC. This paper explores the determinants of the development and competitiveness of IFCs in an analytical and empirical framework and the China factors will be the focus.The ensuing paragraphs provide an overview of the latest status of Hong Kong's financial services sector and discuss the challenges faced by our financial services sector, as well as the opportunities arising from the 11^th FYP, which is an important document outlining the blueprint for China's economic and social development from 2006 to 2010. Paper also applied the model of Neoclassical Growth Theory and the Pyramid of Metropolis (City) Competitiveness Model to define the relationship between IFC and economic development. In conclusion, Hong Kong need to consolidate and enhance our position as an international financial center which help to improve HK's capacity to absorb shocks and foster local and national development.