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Business Times
15-05-2025
- Business
- Business Times
Ex-Goldman banker leads China's push to revive Hong Kong finance
[HONG KONG] The crowd was taken aback as China's point person for financial matters in Hong Kong laid out plans to re-energise the city's markets. Qi Bin's proposals on topics including corporate governance were not shocking on their face, but the regulators and other policymakers gathered at the Grand Hyatt ballroom in January had rarely heard a mainland Chinese official give such detailed prescriptions on how the city's finance sector should be run. For those in attendance, the speech marked a change in China's approach towards a key pillar of Hong Kong's economy – one that has until now has remained relatively untouched by Beijing's years-long push to tighten its grip over the former British colony. Such a shift would underscore Hong Kong's crucial role as China's gateway to international capital, especially at a time of elevated concerns about a potential financial decoupling with the US. But the more assertive style from Qi – a former Goldman Sachs banker who held senior regulatory and investment roles before becoming deputy director of the Chinese Liaison Office in November – has also ruffled feathers among some local officials. Even those who agree with Qi's ideas worry they are losing authority over the city's most important industry. After Qi's speech, delivered in Mandarin instead of the local Cantonese, attendees rushed to get a hold of the full transcript, which was splashed on the front pages of local newspapers the next day. Two months later, the 56-year-old official – this time in fluent English – gave a similar talk in front of a broader audience of foreign bankers, investors and dignitaries at HSBC Holdings' annual flagship conference. Since arriving in November he has met regularly with members of the financial community and has submitted suggestions to regulators on topics such as initial public offerings and corporate governance, even though local officials have no direct reporting line to the Liaison Office. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up This story is based on conversations with more than a dozen people who have interacted with Qi and who asked that they not be identified speaking about private interactions. Qi was not available for an interview. In a statement, the Liaison Office said the Hong Kong government is 'the head of family' and referred any questions on the city's economic situation to its government officials. In Qi's inaugural speech, he called for a White Paper and timetable for market improvements to meet top global standards when it comes to market regulation, trading costs and corporate governance. He invited academics and market participants to contribute 'to show our sincere and determination for reform', according to Qi. He also shook things up by announcing a global summit in the city to rival the World Economic Forum, the annual gathering of business, finance and policy elite in Davos. The event, originally scheduled for Jun 26 to 27, was recently postponed because of the fluid geopolitical situation. A spokesperson for the Financial Services and Treasury Bureau said that an announcement on a new date will be made in due course. The Treasury Bureau declined to comment further. Still, no one is arguing that Qi, also a former Chinese top regulator and wealth fund executive, is not qualified to give advice. His Western education and Wall Street background are also viewed as a welcome departure from typical mainland Chinese officials. Qi, who is one of five deputy directors under Director Zheng Yanxiong, previously served as vice-president and deputy chief investment officer of China Investment Corp (CIC) the nation's sovereign wealth fund. He joined CIC in 2016 with a mandate to expand the US$1.3 trillion fund's direct investments overseas, including US Midwest factories. Sally Wong, chief executive officer of the Hong Kong Investment Fund Association, which represents firms with more than US$52 trillion in assets under management, said Qi's 'insights can provide invaluable perspectives when Hong Kong continues to re-invent ourselves to bolster our international financial centre position'. The political implications of the speeches he made earlier this year have been over-interpreted in some circles, she said. 'There is unwavering commitment by the central government to uphold the principle of one country, two systems for Hong Kong.' Originally a science student – he obtained a master's degree in biophysics from the University of Rochester – Qi later realised his real interest was the US economic system. This led him to pursue an MBA from the University of Chicago Booth School of Business – a hub for free market economics – where he studied under people such as Nobel Prize laureate Merton Miller and Sam Peltzman. Qi recalled that he had borrowed money from everyone he knew to pay the tuition instead of continuing with a fully-funded PhD in Rochester, according to a 2017 interview in Chicago Booth Magazine. After graduating from Chicago he eventually joined Goldman Sachs, where he worked from 1998 to 2000 as an associate in Alternative Investment Manager Selections. Qi returned to China in 2000 to join the China Securities Regulatory Commission (CSRC), where he for 16 years oversaw funds, financial innovation and research. While at the CSRC, he completed a PhD at China's Tsinghua University, which explored the development of institutional investors and the volatility and efficiency in China's capital markets. It was during this time that Qi first became well-known in Hong Kong. He led the CSRC team in the negotiations to set up the city's landmark Stock Connect programme, the trading link between Hong Kong and mainland exchanges that now sees billions of US dollars in daily trading. During the months-long work meetings with Hong Kong regulators in 2014, Qi was instrumental in bridging Chinese concerns over risk management, and demonstrated an international mindset that left a lasting impression, according to sources with direct knowledge of the talks. As well as a student of Wall Street, Qi is also an avid writer, who often shared his thoughts in Chinese media on capital market developments and the US-China trade war during Donald Trump's first term. He has translated the three editions of 'The Great Game: The Emergence of Wall Street as a World Power' by US historian John Steele Gordon. While in Hong Kong for his new role, Qi has reached out to major banks, financiers, regulators, lawyers and even chambers of commerce for coffee, lunches and dinners. The invitations from Beijing's financial point man took most by surprise. During meetings, he has probed people's views on capital markets, listings, trading and the status of Hong Kong as a financial centre. He has more the manners of a college professor than a banker or a stereotypical Chinese official, the sources said. In some encounters, Qi has floated ideas about asking China to unleash more companies to list in Hong Kong when conditions are ripe, according to the sources. He also said that China's support for Hong Kong's dollar peg was unwavering. Offering help Some foreign firms were wary of the implications of a meeting given his position within the Chinese government. Nonetheless, the exchanges were constructive and comfortable, the sources said, though Qi did not make any concrete promises. Lyndon Chao, head of equities and post-trade at Asia Securities Industry & Financial Markets Association, representing over 160 financial firms in the region, said Qi's team has offered help in connecting with their Beijing counterparts. 'Beijing sent a strong signal by assigning a financial expert such as Qi to Hong Kong, to recognise the importance of the city as an international financial centre (IFC) and to help instill confidence on the ground,' he said. 'We understood from communications with Chinese regulators that Hong Kong would be well served by demonstrating more independence in financial policies and to showcase to the world its rightful place as an IFC.' In formal settings, Qi has routinely met with the stock exchange and Securities and Futures Commission (SFC) since his arrival, according to four sources. Qi has also submitted his personal suggestions to regulators. The SFC and the Hong Kong stock exchange declined to comment. According to David Webb, a long-time activist investor in Hong Kong, the city needs to improve investor protection, prevent a further weakening of rules, more mandatory reporting and proper independent directors. Webb spoke this week at the Foreign Correspondents' Club. China has become more hands-on in Hong Kong since the national security law was passed, and regulators now typically inform Beijing before they change any major financial policies. By contrast, when building the Stock Connect no pre-approval was needed from the Beijing offices in Hong Kong to kick-start discussions. They were informed only later in the process, according to two sources. Given his education at the heart of Western economics, Qi's view is that open markets can be reconciled with China's planned economy. 'There is no such thing as a completely free economy,' Qi said in the university magazine interview, noting that most countries have regulations. 'It's always about degrees of freedom. China's story is an example of how the Chicago idea works in a gradual and pragmatic approach.' BLOOMBERG
Bloomberg
15-05-2025
- Business
- Bloomberg
Ex-Goldman Banker Leads China's Push to Revive Hong Kong Finance
The crowd was taken aback as China's point person for financial matters in Hong Kong laid out plans to re-energize the city's markets. Qi Bin's proposals on topics including corporate governance weren't shocking on their face, but the regulators and other policymakers gathered at the Grand Hyatt ballroom in January had rarely heard a mainland Chinese official give such detailed prescriptions on how the city's finance sector should be run.
