Hong Kong’s homegrown investment bankers are rapidly losing their status as the city’s go-to dealmakers, supplanted by mainland Chinese rivals who now hold a majority of senior jobs in Asia’s biggest financial hub.
The figures underscore the uncertain economic future facing even well-to-do Hongkongers, many of whom thrived for decades by acting as financial intermediaries between a rising China and the rest of the world. While some in the industry have enjoyed relative stability in roles such as trading that rely less on client relationships, those jobs are also under threat as China makes it easier for global firms to bypass Hong Kong and access onshore markets directly.
Hong Kong bankers’ careers “will be doomed” if they don’t learn to adapt to an industry increasingly dominated by Chinese clients and employers, said Michael Ngai, a former MD at UBS who is now chair of The Red Group, an investment firm. He’s also a member of the National Committee of the Chinese People’s Political Consultative Conference, the country’s top political advisory body.
Goldman Sachs appointed three Chinese nationals to its most recent partner class in 2018, the most to date from the country. The group included China investment banking head Wei Cai, the first person hired by the US bank as a partner for China. The firm’s senior promotions for Hongkongers in recent years have mostly come in areas that are less client facing, such as trading, research and support functions.
One potential advantage for local bankers is that they face a more favourable tax regime in Hong Kong than their mainland peers. China’s government recently began imposing a levy on its citizens’ offshore income — a decision that could leave mainland bankers in Hong Kong paying triple the local rate as well as footing the bill for the city’s sky-high living costs. Some are already considering moves back to China if their employers don’t increase salaries to offset the new tax.
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