Hong Kong: Chan aims to maintain financial order
Hong Kong’s Financial Services under-secretary is a rare species: a government official willing to talk to the media, despite holding such a tough job of keeping the SAR’s markets operating smoothly in a time of chaos.
Hong Kong is tense and burning, enveloped in an acrid haze that has drifted across the harbour from the protestors’ fires engulfing the Polytechnic University on Kowloon-side.
The smoke compels gasping staff at the government’s Financial Services and Treasury Bureau (or FSTB) to don gauze facemasks to help them breathe. On television in the department foyer, a news ticker reports that the editor of Beijing’s influential Global Times, oft-regarded as a voice of the Chinese regime, has urged Hong Kong police to shoot protestors at the besieged college.
Unsurprising then that getting to the FSTB’s influential under-secretary, Joseph Chan Ho-lim, takes some doing. Visitors to the department must first negotiate several layers of security and then navigate a formidable canyon of two-metre-high water-filled protective barriers that were hurriedly erected in July, lest the protestors who have overwhelmed this city for several months decide to take up their grievances directly with officials themselves.
A short walk away in Central, the financial district where Chan used to work, downtown Hong Kong is again about to become a virtual no-go zone, a near-daily occurrence as lunchtime protestors, many of them working in surrounding banks and offices, confront riot police equipped with tear gas.
I never imagined that we would be in such a prolonged and violent situation - Joseph Chan Ho-lim, FSTB
Once inside Chan’s department, Asiamoney is escorted through a maze of corridors by a 20-something department page wearing a bomber jacket emblazoned with the words ‘Team Chaos.’
Is it a fashion statement or a political one, subversive commentary about where he works? Whichever it is, the page doesn’t say before he deposits us before the polished Chan, who has been the bureau’s under-secretary in chief executive Carrie Lam’s administration since 2017.
The FSTB is a crucial agency of her government, administering the territory’s financial services sector, which employs more than 250,000 people across the territory and contributes a quarter of Hong Kong’s GDP.
Unusually for a senior government official during these difficult months, Chan has agreed to be interviewed, his willingness in stark contrast to many of his government colleagues – not least his embattled boss Lam – who have hunkered down to avoid media and public scrutiny.
“I never imagined that we would be in such a prolonged and violent situation,” Chan says of the anarchy that has overwhelmed his hometown.
At 42, Chan is one of the government’s rising stars and is widely tipped to soon take over from 69-year-old James Lau as financial services secretary. Chan is also mentioned as a possible successor to 64-year-old Paul Chan Mo-po as financial secretary, one of the top three jobs in Hong Kong behind that of chief executive.
An economics graduate of the University of Michigan, Chan has the political credentials. From 2012, he represented the pro-Beijing Liberal Party as a district councillor, elected by Hong Kong’s wealthiest constituency (which covers Hong Kong island’s Peak neighbourhood).
Before politics, Chan was an investment banker with Merrill Lynch, Bear Stearns and Standard Chartered.
His last job in banking was as Crédit Agricole’s managing director of global markets.
To his credit, Chan doesn’t shirk discussing Hong Kong’s drastically changed ground reality. Then again, it would be ludicrous not to. As he admits, there isn’t a Hongkonger among the 7.5 million here that has not been affected in some way by the turmoil.
“As a Hongkonger I want to see the violence stop because it does no good to anybody,” he says. “[These] deep-rooted problems have emerged in a very drastic way; we really need to address this.”
Joseph Chan Ho-lim, FSTB
Chan is keen to stress that despite the bedlam outside, it is mostly business as usual for Hong Kong as Asia’s leading financial centre. Though key indicators such as the stock market’s benchmark Hang Seng Index have suffered – the HSI is down 12% from its year high, set on April 10, just weeks before the protests began – Chan says that systemically, Hong Kong’s market have been orderly.
“We have never suspended the market through these difficulties,” he points out.
“The impact is more on other industries,” he says. “Tourism, retail, restaurants... I think those got hit because we have lost tourists coming here, apparently because they’re concerned about their freedom of movement within the city. And I think those segments of the economy have been hit, but finance has not.”But Chan admits bankers are concerned. He explains that recent work days have been spent explaining to them that despite the turmoil, Hong Kong’s markets are open and functioning normally.
“Of course, short term, we do have the impact and we have to admit that,” he says. Bankers and financial services operators “always want to get more about the general picture of this whole social unrest and where it leads.”
He says: “Because of safety concerns, certain conferences may get cancelled, certain meetings might get postponed.
“Everybody wants to see an end, and we don’t want to see violence on the street. So I think that those questions are not really related to finance or financial services, just as a society in general. That’s what they are interested in knowing.
“Secondly, they also ask us for assurance about the markets, [that they] are being conducted orderly. But they know better than we do, in the sense that they are in the market and that they can see [that] equity transactions do go on, the capital flow remains the same.
“If you look at the past few weeks or so, even the Hong Kong dollar has never touched the weak side of our band, so for those who are in the market, they see the capital flow, they see the FX rates movement, they see the IPOs and all that; they know that it’s normal but still they want assurance from us. They will talk to us and then we just repeat the same line. If you look at the markets, they are being conducted orderly, with no issue.”
Chan is also keen to dismiss the notion, often mentioned here in recent months, that Hong Kong is now seen as unreliable by Beijing and will be sidelined as its financial centre in favour of Shanghai and Shenzhen.
If you look at the markets, they are being conducted orderly, with no issue - Joseph Chan Ho-lim, FSTB
Those two cities, he points out, don’t enjoy free flow of capital or information as is enshrined in Hong Kong’s constitution, the Basic Law agreed between London and Beijing in the lead-up to the 1997 change in sovereignty.
“If you look at our system; legal, capital, currency, free convertibility, information – it’s very unique, you look at other cities in China and they don’t have it,” Chan says.
“I never believe that someone (in China) will say: ‘Oh, actually we want to create something similar or equivalent to Hong Kong to play that role’, because our role is very unique.
“Our core competitiveness has not been affected at all by the current situation. Of course, we suffer in terms of the image of the city, of safety, it’s going to affect it, no doubt about that. But those are more like social or life issues, but if you look at the financial system, legal, capital, tax and so forth, it rolls on.
“We are the leading financial centre in Asia, so I think all this gives me a lot of optimism. But there is more the short-term issue to get through, so that we can move on from where we are.”
With no end in sight for the protests, that might take some time, he admits.
The weekend after we speak, Hongkongers voted overwhelmingly for pro-democracy candidates in district council elections. Chan’s old Peak seat was one of the few pro-Beijing seats that did not fall to democrats. And a week after those polls, protestors were back on the streets and getting tear-gassed.
“I think these are things that we really need to address in the long run as a government,” Chan says. “But then for the time being we need to stop the violence, because if the violence is not stopped, then dialogue cannot be open. Without the dialogue then we cannot move forward. It is difficult.”