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  • Pranav Patvardhan

The battle for Asia's next financial hub - which city would you pick? (Please vote in the comments!)

Updated: May 22, 2023

The battle for Asia's next financial hub - which city would you pick?

Hong Kong has long been touted as the financial hub of Asia, given the British colonial heritage that allowed it to function as an effectively capitalist center of commerce right at the doorstep of a newly liberalized and booming communist China. If businesses and banks wanted access to the China market, there was no better place to set up shop than Hong Kong, with strong laws and established institutions and freedoms, quality of life, and English language levels that could not be hoped for on the mainland.

But the city's very strengths have become its Achilles' heel - with the waning of its democracy to Chinese authoritarianism much before the promised date and the enactment of new security laws last year, the city's days as a free haven at the doorstop of China and the financial capital of Asia may have come to an end. Not only are freedom-loving citizens fleeing the city for liberal nations like Canada, Singapore, Australia, and the UK, but so are businesses and banks.

Given this context, where do you think would Asia's next financial hub be set up?


Pros -

  • The Chinese communist party wants to position Shanghai financial hub as their main financial hub simply because it's a product of purely their creation. Hong Kong owes its success to the British and capitalism and would not make for good nationalist propaganda for an emerging China. It will undoubtedly receive massive state support for creating a conducive legal environment that attracts global banks.

  • Many top-class universities are now attracting even the best of the world, including Fudan, CEIBS, and Shanghai Jiao Tong, which churns out skilled labor.

  • State-of-the-art infrastructure, including roads, public transportation, and air connectivity to other financial hubs.

  • Historic business hub at the center of what will soon be the world's largest economy.

  • A large number of HNWIs and ex-pats.

  • The weather is pleasant year-round.

Cons -

  • Very much in mainland China and subject to totalitarian state laws, making it unfeasible and unsafe for citizens of nations with strained ties with China. Businesses and banks fleeing Hong Kong due to fear of Chinese totalitarianism are very unlikely to set up here.

  • No access to Gmail, Google, Instagram, Snapchat, Facebook, Twitter, etc. Without a VPN, foreigners are effectively cut off from the rest of the world (and they do not always work well).

  • Very limited English language skills available.

  • Shanghai financial hub will be expensive as it has a high cost of living, especially with regards to housing.


Pros -

  • Already a financial hub with strong links to London and New York from the days of the bubble economy, with strongly established businesses. Has more Fortune 500 companies than any city in the world (613 as of 2018).

  • Great quality of life, with incredible access to culture, art, recreation, sports, and healthcare, will act as prominent factors in making Tokyo the next financial capital of Asia.

  • One of the safest cities in the world, making it ideal for families.

  • State-of-the-art infrastructure, with some of the best railways, technological capabilities, public transport, and connectivity in the world.

  • Some of Asia's best universities, including Keio and the University of Tokyo.

  • Politically stable and strong relations with the West and ASEAN.

  • Several megabanks call the city home, including MUFG, Mizuho, and Sumitomo.

  • Very cash-rich banks and companies with immense capital to invest.

Cons -

  • Very high cost of living for ex-pats, being in the global top 5 consistently.

  • The highest natural disaster risk of all cities on this list or perhaps of any major financial hub, including earthquakes, tsunamis, typhoons, and volcanoes, creates some reluctance in investors.

  • The aging population and sluggish growth in recent decades have cast doubt on the future economic clout of Japan.

  • Highly rigid and hierarchical work culture, particularly within banks that would not suit Western talent in particular.

  • Highly risk-averse business culture.

  • Poor English skills and a reluctance/shyness to speak it.

  • Poor entrepreneurial activity owing to the risk-averse culture of Tokyo financial hub and the "Galapagos syndrome."

  • Summers can be very hot, with frequent typhoons and storms.


Pros -

  • Already strong Chinese cultural roots, with over 70% of the population being ethnic Chinese. This makes the city attractive for not just fleeing Hong Kongers but also wealthy Chinese mainlanders looking to flee their country's repressiveness.

  • English language skills are abundant, being one of the 4 national languages.

  • Most diverse of any city on this list, being a haven for Indians, Malays, westerns, etc.

  • Some of the world's best universities, including NUS, NTU, SMU, and INSEAD.

  • This economic powerhouse facilitates a very conducive business environment, being one of the easiest places in the world to do business. This has attracted both startups and global venture capital, including Inmobi, Zilingo, Grab, etc., that were founded elsewhere but set up HQs in the country due to its conducive environment. Several global banks have already set up regional head offices here, including large local banks like DBS and OCBC.

  • The unrivaled location puts it right between economic giants like India, China, and Indonesia, enabling it to become Asia's Switzerland with an emerging private banking sector.

  • Safe, great quality of life, public transport, infrastructure, and education make it ideal for families. World's best airport offers connectivity to all corners of the world.

  • Very low natural disaster risk, being shielded by Sumatra and the Indonesian archipelago.

Cons -

  • Recent ethnic tensions and racism have exposed cracks in the city-state's tolerant facade, raising a red flag for Singapore financial hub to be Asia's next financial hub.

  • Very high cost of living, always being in the top 10.

  • Very small country, offering little diversity in landscape and attractions.

  • Rigid work visa laws have only become stricter post-pandemic.

  • Most susceptible to global geopolitical risks being such a small country with heavy reliance on MNCs and international trade.

  • Very hot and humid throughout the year.

Would love to know your thoughts on which of these economic powerhouses has the best shot and how Mumbai can even hope to join the ranks of being Asia's next financial hub one day, a city crippled by appalling infrastructure, world-class traffic, a passion for floods, a toxic work culture, lower safety, passive racism and poor quality of life v/s the competition.

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