Why international finance centres like Hong Kong are crucial connectors in a fragmented world

As global fragmentation intensifies, international financial centres (IFCs) have a crucial role to play. These cities or regions that are hubs for international financial transactions and activities not only facilitate capital flows and global connectivity but also have within them the expertise and experience to shape tomorrow’s financial systems.

Geopolitical complexities now make global trade and capital flows harder. These new realities threaten the global consensus needed to address new challenges, such as funding innovation to drive global growth and financing the green transition.

Throughout my career, I observed first-hand how crucial the spread of capital across the world has been to drive global progress. Unprecedented economic and financial connectivity has brought significant growth and prosperity to help lift people out of poverty.

Sustaining this progress requires more international cooperation rather than the current pattern of fragmentation in our global financial system.

A surge in protectionist measures threatens to slow the flow of trade, depress investment and in the process, reshape global supply chains, cutting countries and companies off from vital pools of capital.

We can also see these growing rifts in how nations address the climate crisis. Some countries are progressing the net-zero transition while others hold it back, blocking the products and materials needed to drive it.

These challenges – in all their different forms – are impacting growth expectations, with the Organization for Economic Cooperation and Development citing fragmentation specifically in its forecast for slowing global growth from 3.2% in 2024 to 3% in 2026 in its interim report.

A rollback in cross-border capital flows and a further decline in global connectivity could, in the worst case, result in an almost 6% decline in global gross domestic product by 2030, according to the Economist Intelligence Unit.

Now, more than ever, we need to transcend geopolitical challenges and build new trust and connectivity.

That’s why IFCs are crucial at this moment. They inherently offer extensive capital markets, diverse investor bases, robust fundraising capabilities and the products, platforms and channels to facilitate the flow of capital.

This combination provides the necessary capital and liquidity for investors and issuers across various time zones and cycles, connecting them with the right opportunities and driving global prosperity, even amid conflict and volatility.

Hong Kong demonstrates why IFCs are crucial in driving the global connectivity needed right now. It has remained resilient and taken a multifaceted proactive approach to addressing global challenges. It also uniquely links China and the rest of the world and vice versa.

Our Connect mutual market access programmes recently celebrated their 10th anniversary – a decade of continuous breakthroughs, expansion and enhancements across various asset classes, from stocks, bonds and exchange-traded funds to interest rate swaps.

These ground-breaking programmes and other microstructure enhancements in our markets connect international investors to China as innovation in the mainland is ramping up.

China has produced advances in artificial intelligence (AI), new energy and biotech that are having ripple effects around the globe, helping drive record levels of trading activity and turnover in Hong Kong over the past year.

Hong Kong’s IFC role also helps drive innovation and support the green transition. Its listing framework has continuously evolved to connect tomorrow’s companies with the funds they need to develop.

Since 2018, reforms have transformed Hong Kong into a world-leading fundraising platform for new economy and biotech companies. That reform journey continued in 2023 with a listing chapter tailored for specialist technology companies in sectors such as AI, quantum computing and green tech.

A green finance ecosystem is also flourishing in Hong Kong, bolstered by robust and transparent disclosure practices, a rapidly evolving ecosystem of environmental, social and governance, sustainable investment products and a voluntary carbon market to facilitate carbon credit purchasing.

As the world changes, superconnectors such as Hong Kong are essential for cutting through complexity, sparking dialogue and shaping the future of growth.

Hong Kong’s designation as the host for the Centre for Financial and Monetary Systems 2025 Symposium underscores its strategic significance and reflects the global financial community’s growing focus on Asia.

In collaboration with the World Economic Forum, we seek to spark a global conversation around capital market connectivity, the role of finance in innovation and the green transition to our region. By bringing an Asian perspective to these topics, we hope to foster meaningful dialogue and build the future of financial markets together.

This event is a testament to the unique ability of Hong Kong and other IFCs to navigate and adapt to fast-changing realities and lead with purpose in creating an ever-more interconnected world.