Hong Kong must move with the times by making itself an efficient :: Economics

Hong Kong must move with the times by making itself an efficientplatform for Mainland pecuniary intermediation.A number of journalists with specialised interests in financialdevelopments in Hong Kong asked for my interpretation of the movewith the times speech delivered by the Governor of the Peoples Bankof China, Zhou Xiaochuan at the Annual Dinner of the Hong KongAssociation of Banks on 30 September 2005. The move with the timescomment was do by Governor Zhou in relation to maintaining thestatus of Hong Kong as an international financial centre.We should of course all move with the times and be alert to changestaking place around us if we do non wish to be remaining behind. Thiscomment has a universal application and is particularly all- most-valuable(prenominal) whentimes are changing rapidly. Those with the ability to anticipatechanges and prepare for them stand a more higher chance of success.Those that carry on doing the same things in the same old way willsimply be left behind. This is the reality.I on the face of it do not wish to quote others out of context or to put wordsin others mouths, just as I do not wish anybody to do the same to me.But Governor Zhou delivered an important speech on a matter of greatimportance to Hong Kong - so important that it merited specialreference in Article 109 of the Basic Law - the maintenance of thestatus of Hong Kong as an international financial centre. And the HKMAdoes have certain verificatory responsibilities for this subject, derivedfrom the Financial Secretarys authority in the Exchange FundOrdinance to use the Exchange Fund, with a view to maintaining HongKong as an international financial centre, to maintain the perceptual constancyand the integrity of the monetary and financial systems of Hong Kong.So, for what it is worth, I will make an exception to my usualpractice and offer my (undoubtedly subjective and possibly biased)interpretation. Since I dont speak from a position of authority, mycomments w ill concentrate more on how times are changing and less onhow we in Hong Kong should move with them.Governor Zhou made it abundantly clear that, in terms of the financialenvironment in which Hong Kong operates, times are changing andchanging fast. He made six important points. First, the savings rateon the Mainland is high by international standards and increasing, incontrast to a zero savings rate in the United States. I take this tomean that there is an exceedingly large amount (relative to GDP) ofdomestic savings on the Mainland to be mobilised and channelled into