A Study On Hong Kong 's International Financial Center Under The Background Of China' S Economic Rise

The development of the financial centre has been a research focus in the financial sector after World War Ⅱ. Various countries are full of enthusiastic for the development of the financial centre and financial centre studies, wanting to really understand why some places can be developed into a global financial centre, some can only develop into a regional financial centre while some places cannot become a financial centre; why some financial centres are evergreen while some others will be replaced.China has developed into a major economic power, will also want to develop into a financial powerhouse. However, the development of China’s financial sector is still lagging behind, and the theoretical and operational study related to the financial centre is still very preliminary. China needs more inputs on studies involved in the construction and development of an international financial centre. The fate and future of Hong Kong’s financial centre are major concerns among the issues raised from the development process of China’s economic and financial centres. Due to historical reasons, Hong Kong has by chance developed into a free and open international financial centre in the colonial era. Since the reform and opening up of the mainland China in1978, Hong Kong has been taking advantages from its culture and location by providing offshore services in re-exports, investments, lending and fund raising to China, shaping the role as a window for China to deal with the outside world, as well as playing the gateway for international markets to deal with China.With the deepening of China’s reform and opening up, the rise of the economy and financial strength, especially the market-orientation and liberalization of the financial sector, Shanghai and Shenzhen financial centres have obtained strong impetus to grow, and gradually build up their own capability to provide financial services for China’s economic development. The rise of the Mainland financial centres has a substitution effect on Hong Kong’s traditional functions to service the Chinese economy. In the long run, Hong Kong’s financial centre exists the risk of being marginalized, even being completely replaced.Hong Kong has returned to its motherland in1997. Keeping Hong Kong’s status as an international financial center unchanged is China’s strategic decision-making to arrange Hong Kong’s reunification, and is considered a China’s international commitment embodied in the Sino-British Joint Declaration and the Basic Law. How to maintain Hong Kong’s status as an international financial centre in parallel with the China economic raising and financial centre strengthening, is the next major strategic issue to study under the circumstance of China’s persisting economic reform and market opening, especially RMB toward the process to become freely convertible currency.The dissertation points out that after the reunification in1997, the financial centre of Hong Kong has been showing some adverse development trend behind its prosperity, including the dilution of intermediary functions, the development trend of financial market simplification and virtualization, as well as market internationalization fading. The dissertation also analyzes deep-seated reasons of Hong Kong facing the risk of being marginalized in the process of China’s economic rise. The dissertation brings out a major issue at the national level of the relationship between the Hong Kong and Shanghai financial centres, puts forward policy recommendations on how to speed up the construction of the country’s financial centre within the system without scarifying the well balance of the relationship between the Hong Kong and Shanghai financial centres.This thesis is closely integrated theory, policy and practice as well as the innovation together, in order to provide a more comprehensive discussion on the development of Hong Kong’s financial relations with the mainland economy after its reunification, to make reference value for decision-making, as well as for economic prosperity of Hong Kong, Financial Centre development of Shanghai, and the coordinated development of the Hong Kong and Shanghai financial centres.