Hong Kong’s Paul Chan urges closer Europe ties, dialogue to work out differences

Finance chief says opportunities exist to tap city’s capital markets, while acknowledging concerns over trade imbalances

Hong Kong’s finance chief has called for deeper cooperation and dialogue with Europe despite disagreements on some issues, saying such engagement is crucial amid growing geopolitical uncertainty.

Writing in his weekly blog on Sunday after a five-day trip to France, Belgium and Switzerland, Financial Secretary Paul Chan Mo-po said European political and business leaders were increasingly seeking strategic autonomy, diversified partnerships and stronger economic resilience in response to geopolitical tensions and rising unilateralism.

“We see pragmatic opportunities for mutually beneficial cooperation between Hong Kong and Europe in areas including trade, investment and innovation and technology,” Chan wrote.

He said exchanges with European financial institutions suggested strong interest in Hong Kong’s financial market, including its investment opportunities, cross-border regulatory cooperation and financial innovation initiatives.

“Representatives from the [European] financial sector pointed out that their current asset allocations were overly weighted towards US dollar assets, creating a problem of excessive risk concentration,” Chan added.

While Europeans “possessed wealth amounting to tens of trillions of euros and ranked among the world’s highest in savings rates”, much of the money remained parked in “conservative” bank deposits and fixed-income markets with modest returns instead of being channelled into innovation and growth industries, he said.