A Paradigm Shift Towards a Green and Sustainable Finance Center

Hong Kong in Transition: A Paradigm Shift Towards a Green and Sustainable Finance Center 21 3.2 Structural Changes in the Financial Market The downturn in Hong Kong’s stock market is associated with changes in business. Import/ export trade, wholesale and retail, financing and banking, professional, business and education services are three major lines of business companies in Hong Kong with parent companies located outside the city. Import/ export trade, composed of wholesale and retail aggregate the largest business line, which presented a steadily growing trend until 2021 (Figure 12). After a sharp fall in 2022, it bounced back in 2023. In contrast, in 2021, professional, business and education services experienced a rapid decline, followed by a rebound in 2023. This sector maintained more or less the same level over the period. Finally, between 2014 and 2015, the financial and banking sector surpassed professional, business and education services; but it decreased for the first time in 2018 and this trend continues. In terms of arrangements of headquarters and offices, companies from Japan, Singapore, Taiwan, Korea and Australia steadily increased in Hong Kong (Figure 13). Companies from the United States and Canada maintained stable. While companies from the United Kingdom, Germany, France, Switzerland, the Netherlands, Italy, and Sweden have grown overall, their numbers have declined since 2019. The number of companies from Mainland China grew the fastest among the four regional groupings. It surpassed the North America grouping between 2017 and 2018, and the West Europe grouping between 2022 and 2023. It is possible that those who plan to continue their business in Hong Kong in the near future will primarily come from Mainland China. Figure 12: Total Number of Regional Headquarters/ Regional Offices/ Local offices in Hong Kong by Major Line of Business (Source: Based on data from “Report on Annual Survey of Companies in Hong Kong with Parent Companies Located outside Hong Kong”) 5000 4500 4000 3500 3000 2500 2000 1500 1000 500 Number of regional headquarters/ regional offices/ local offices 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Import/ export trade, wholesale & retail Professional, business & education services Financing & Banking