ReleaseWire Connect

Investment banking developments in China & Hong Kong have expanded exponentially in recent times, as the world's second largest economy has opened up its financial markets. One of those looking to shift focus in the region is Citigroup, which has already begun to move away from retail banking in this part of the world in order to focus on investment banking. Citigroup Inc is driving ahead with plans to establish fresh investment banking and trading operations in China.

The airline industry has been on the frontline of the impact of COVID-19 with carriers - and investors - really feeling the effects of a world that has largely shut its borders over the past 12 months. Now there are signs of trouble for investors in Cathay Pacific's foreign-currency bonds, as prices drop.

Fintech has been a significant growth area and has exciting potential for those pursuing financial services careers in Hong Kong. However, the People's Bank of China (PBOC) is currently taking steps to rein in the monopolistic behaviour that many fintech firms have been displaying. Most recently, Jack Ma's Ant Group has been on the receiving end of sanctions from the PBOC. According to the central bank, Ant Group is not the only offender as many other mobile payment companies have breached anti-monopoly laws and the PBOC intends to take action against them.

Clean energy is having a big impact on many industries, including banking and financial services. One of the key investment banking developments in China & Hong Kong is the remodeling of sectors such as natural resources, metals and mining, as banks look to take steps towards better serving the sustainability needs of their corporate clients.

China has taken another step towards the integration of the country's financial system with global markets that could see billions of dollars flow into Hong Kong. The Wealth Connect Programme would allow investors to invest up to RMB 150 billion each way between Hong Kong and mainland China. The plan is expected to be a watershed moment in China's financial liberalisation, since it would make it much simpler for a portion of the country's vast wealth to be invested beyond its boundaries. It would allow residents of the Greater Bay Area, which includes cities such as Guangzhou and Shenzhen, to invest in Hong Kong.

Managers in Hong Kong have the opportunity to benefit from the burgeoning wealth in China that has come into fruition from the expansion of the asset management industry on the mainland. Following the implementation of Limited Partnership Fund Ordinance (LPF), fund managers are diversifying their holdings. Many are considering launching a number of funds under a single umbrella structure. Establishing a private equity fund in Hong Kong can be more worthwhile for Chinese managers and boost investor confidence.

Chinese efforts to integrate its financial system on a global scale have taken another step towards a conclusion with The Wealth Connect programme. The programme allows for investments of RMB 150 billion ($ 23 billion) to be made in either direction between Hong Kong and mainland China, with an individual limit of RMB 1 million ($ 155,000). It will open the door to more investment in Hong Kong from China, including the Greater Bay Area, which is home to more than 70 million people.

Digital currency is a hot topic in Hong Kong right now - and all across the globe. Since 2019, the Hong Kong Monetary Authority (HKMA) has been working with Thai and Chinese central banks to make it easier to use digital currencies for cross border trade. A recent statement from HKMA, together with the Bank of Thailand, the Central Bank of the United Arab Emirates and the Digital Currency Institute of the People's Bank of China revealed that the digital currency project for cross border payments - which was initiated from Hong Kong and Thailand - had now reached Phase II.

There is no doubt that 2020 was a challenging year for the financial services sector in Hong Kong. Like many other jurisdictions the region was hard hit by the pandemic. However, there are now plenty of green shoots of recovery across the industry and specialisms such as fintech jobs have continued to thrive even through pandemic conditions. Many positive signs exist for 2021. For example, Chinese intentions to open the domestic Chinese financial services sector to foreign investment have been made clear by the wholly foreign-owned enterprise rules (WFOE), which will enable foreign investors to tap into growing investor demand. The Wealth Plan from the People's Bank of China is another clear sign of recovery in the region and is especially promising for Hong Kong. Innovative banking is also gaining ground in Hong Kong, from fintech jobs to virtual banks and there have even been record trading volumes in many of the world' largest banks, all indicating a promising 2021 to come.

The past 12 months have had plenty of lessons for investor relations recruiters - in particular, that change is constant. This is especially apparent from trends that are emerging in areas such as corporate and investment banking. An increasingly competitive and swiftly changing landscape represents one of these trends, with the launch of Hong Kong's first virtual bank a prime example of just how fast the industry here is moving to get ahead.