Hong Kong is expected to overtake London by 2015 and surpass New York by 2016 to become the world’s biggest financial centre, reflecting a massive shift in the balance of power in the financial world and a remarkable turnaround since the financial crisis.
By 2015, the number of financial service jobs in Hong Kong, which was less than half the London number in 2005 – will have overtaken London to reach 248,000, according to the lastest report released by the London-based Centre for Economics and Business Research (CEBR). By 2015, London would have 237,000 financial sector jobs, the report said.
Hong Kong will also challenge New York, the US financial hub which only this year dethroned London as the world’s largest financial centre. By 2016, Hong Kong will have 262,043 financial professionals, compared with 252,543 in the Big Apple.
Between 2008 – the year in which the global financial crisis set in – and 2012, the number of financial jobs has grown 12 per cent in Hong Kong, compared with a 23 per cent decline in London and a 10 per cent fall in New York over the same period.Western cities are losing their lead because of “the more dynamic growth of the Asian economies, which has created a booming demand for financial services”, the report said.
‘Much of this shift is inevitable as a result of the world’s changing economic geography. And Hong Kong will be boosted by the internationalisation of the renminbi,” the report said.
Meanwhile, the city of London lost its crown also due to “short-sighted over-regulation, penal taxation and banker bashing” as well as the “inevitable” economic shift to the east, it said. New York has declined by less than London because of the greater strength of the US economy over the European economy, the London-based research centre said.
The fall in financial sector jobs in London has been accompanied by a sharp fall in the bonus pool, CEBR said. This Christmas, financial staff in London may only get £1.6 billion in total, down from 11.6 billon pounds in 2008. That means every financial staffer will only get £6,400 this Christmas on average, compared with a peak of £33,000 in 2008.
The sharp fall results from a sharp fall equity trading in the city, which has fallen 20 per cent in value from 2011, and international orders for equity trading have halved compared to 2011, CEBR said.
CEBR also revised down its bonus forecast from six months ago and said the “only high points” for the beleaguered City of London were private equity and technology M&A deals.
December 13, 2012