TNAG-2467-FCO40-3591-Economic-situation-in-Hong-Kong-1992 — Page 78

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3.26 In general it is suggested that financial sector firms will be attracted to a location where lots of similar companies are already sited because it is more likely that large, well organised markets will already exist there and companies have more opportunity to build up business contacts than in locations with fewer participants. These considerations will also discourage those already in a well

established centre from re-locating elsewhere.

3.27 The risk for Hong Kong is that its attractiveness to newcomers

and its reputation as a regional financial centre could be progressively eroded by the departure (or even contingency planning

for a quick escape) of a few important players. Relevant here are:

the prospective move of HSBC's 'mind and management' to Londor. next year following its merger with Midland, although of course Hongkong Bank will continue as Hong Kong's main bank;

Jardine's plans for a secondary listing in London;

the risk of the banking business between Hong Kong and Japan

decreasing;

the pace at which Hong Kong companies are switching domicile,

amounting to around 70 in the last three years.

Other Aspects of Infrastructure

3.28

A number of other aspects of the infrastructure of Hong Kong

and Singapore can be identified: Legal Structure; Standards of

Disclosure; Macro-economic Management; Language and Culture. In all

these factors there is arguably little to choose between Hong Kong

and Singapore when considering those features which have attracted or deterred international companies.

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