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Jersey has positioned itself strongly to support Chinese outbound investment and cross-border wealth management but a significant volume of work remains untapped, according to speakers at a recent event organised by HSBC looking at opportunities for Jersey in Asia.
Speaking at the event, ‘Exploring Growth Opportunities in China’ held in Jersey last week (21st February), visiting guest speaker Sue Anne Tay, Director, China and RMB Internationalisation, Group Strategy, HSBC, offered a number of insights into key trends and opportunities emerging from China. In particular, she highlighted two areas where Jersey could be well positioned to build business:
“Since China’s opening up, the world has been fixated on the country’s unprecedented domestic economic transition but we are now seeing the next big trend that is China’s ‘going out’ in terms of outbound investment and flows, which is having a significant impact on the global economy today.
“The rise of China’s middle class, with its accompanying tastes and demand, is a fundamental force shaping what China is acquiring overseas today. This is reflected in a shift in overseas acquisitions from energy and commodities, to a rising demand for technology, services and consumer brands. With that, we see a growing need for financial and professional services that can support their outbound investment.
“At the same time, China’s initiated Belt and Road Initiative, which aims to develop and improve infrastructure with the specific purpose of connecting China and the rest of the world, in particular with Europe, is perhaps the biggest initiative of the 21st century.
“China has announced that $900bn in current and ongoing projects are underway and recently added another $140 billion in financial support. But the sheer scale of the project, with an estimated infrastructure demand in Asia of $1.7 trillion per year till 2030, means that accessing private and institutional capital will be vital. Jersey’s strong access to the capital markets through, for instance, the London Stock Exchange and its specialist professional expertise in Europe has the opportunity to play a role here.”
Joining Sue Anne on the stage were a number of local experts with first-hand experience of working with China. In a panel session exploring the rapid pace of change in China, Geoff Cook, CEO, Jersey Finance, Jonathan Rigby, Global Managing Partner, Mourant Ozannes, and Michel van Leeuwen, Group Chief Executive, Hawksford, underlined the focus on innovation in China.
Highlighting that Chinese technology companies are now competing with the best digital companies in the world and explaining just how prevalent platforms like WeChat are in facilitating business, they argued that embracing technology is absolutely critical for firms wanting to engage with the Chinese market.
Agreeing that other centres have in the past traditionally been used by Chinese investors for international investment, the panellists also agreed that Jersey is uniquely positioned to support a new generation of Chinese investors who the first time are having to navigate unchartered waters in terms of international regulatory, compliance, tax and political risks.
Warwick Long, Head of Commercial Banking, HSBC Channel Islands and Isle of Man, who moderated the panel session, added:
“Jersey has made good inroads into China over the past decade and seen a good volume of work come its way, but the feeling is that we’ve barely scratched the surface. There are real opportunities for Jersey firms to pick up their market share, particularly where the Belt and Road Initiative is concerned and in supporting the investment and business objectives of China’s new middle class and wealthy. Europe, particularly EU Member States and the UK, is a large investment destination for Chinese companies and individuals and Jersey has the experience, close proximity and deep understanding of these markets to play a key role.
“What is clear is that the new generation of Chinese investors are not as cost-driven as previous generations and are much more hungry for quality services and expert knowledge, and Jersey’s positioning as a high quality centre makes it ideally placed. Looking forward, the key will be in harnessing technology and embedding digital platforms to engage the market and tell our story. If we don’t do that, we will miss the boat.”
