London Daily

Focus on the big picture.
Saturday, Nov 08, 2025

Hong Kong Courts the Rich as China Tightens Its Grip

Hong Kong Courts the Rich as China Tightens Its Grip

Political opposition has been quashed. Free speech has been stifled. The independent court system may be next.
But while Hong Kong’s top leaders take a tougher line on the city of more than seven million people, they are courting a crucial constituency: the rich. Top officials are preparing a new tax break and other sweeteners to portray Hong Kong as the premier place in Asia to make money, despite the Chinese Communist Party’s increasingly autocratic rule.

So far, the pitch is working. Cambridge Associates, a $30 billion investment fund, said in March it planned to open an office in the city. Investment managers have set up more than a hundred new companies in recent months. The Wall Street banks Goldman Sachs, Citigroup, Bank of America and Morgan Stanley are increasing their Hong Kong staffing.

“Hong Kong is second only to New York as the world’s billionaire city,” said Paul Chan, Hong Kong’s financial secretary, at an online gathering of finance executives this year.

Beijing can’t easily afford to scare away Hong Kong’s bankers and financiers. The former British colony remains a major gateway to the international financial system. Chinese companies need it for raising money from global investors; those companies and wealthy Chinese also rely on it to move their money overseas more readily.

So Beijing is striking a careful balance. It is stripping liberties from Hong Kong’s people to stop brazen challenges to Communist Party rule, like the sometimes violent antigovernment protests that erupted two years ago. At the same time, it is trying to charm the city’s financial class to keep it from moving to another business-friendly place like Singapore.

“It is a one-party state, but they are pragmatic and they don’t want to hurt business,” Fred Hu, a former chairman of Goldman’s Greater China business, said of Chinese officials.

For apolitical financial types, the changes will have little impact, said Mr. Hu, who is also the founder of the private equity firm Primavera Capital Group. “If you’re a banker or a trader, you may have political views, but you’re not a political activist,” he said.

To entice the wealthy, Hong Kong is completing work on a big tax break that will primarily benefit private equity, hedge funds and other investors. Officials are moving to make it easier to connect the city’s money managers with affluent mainlanders. Chinese companies are selling tens of billions of dollars’ worth of shares in Hong Kong, padding the profitability of Wall Street banks.

In its most recent move, Hong Kong last week proposed limiting how much companies must disclose about their ownership, which could shroud wealth in a city where the families of the Communist Party’s elite have long parked their money.

Not everybody has been won over. More than 1 percent of residents have left since Beijing imposed a broad national security law last summer. Tens of billions of dollars have flowed out of local Hong Kong bank accounts and into jurisdictions like Singapore.

Tensions run taut inside Hong Kong’s gleaming office towers. Even executives who are sympathetic to the government have declined to speak publicly for fear of getting caught in the political crossfire between Beijing and world capitals like Washington and London. Hong Kong’s tough rules on movement in the pandemic may also spark some expatriates to leave in the summer once school ends.

For now, however, financial firms are doubling down on Hong Kong. Neal Horwitz, an executive recruiter in Singapore, said finance was likely to remain in Hong Kong “until the ship goes down.”

In its biggest offering to the investor class, Hong Kong has proposed eliminating taxes on investment income called carried interest, which is typically earned by private equity investors and hedge funds. Officials had discussed the plan for years but didn’t introduce a bill until February, and it could pass in the coming months through the city’s Beijing-dominated legislature.
Newsletter

Related Articles

0:00
0:00
Close
UK Government Turns to Denmark-Style Immigration Reforms to Overhaul Border Rules
UK Chancellor Warned Against Cutting Insulation Funding as Budget Looms
UK Tenant Complaints Hit Record Levels as Rental Sector Faces Mounting Pressure
Apple to Pay Google About One Billion Dollars Annually for Gemini AI to Power Next-Generation Siri
UK Signals Major Shift as Nuclear Arms Race Looms
BBC’s « Celebrity Traitors UK » Finale Breaks Records with 11.1 Million Viewers
UK Spy Case Collapse Highlights Implications for UK-Taiwan Strategic Alignment
On the Road to the Oscars? Meghan Markle to Star in a New Film
A Vote Worth a Trillion Dollars: Elon Musk’s Defining Day
AI Researchers Claim Human-Level General Intelligence Is Already Here
President Donald Trump Challenges Nigeria with Military Options Over Alleged Christian Killings
Nancy Pelosi Finally Announces She Will Not Seek Re-Election, Signalling End of Long Congressional Career
UK Pre-Budget Blues and Rate-Cut Concerns Pile Pressure on Pound
ITV Warns of Nine-Per-Cent Drop in Q4 Advertising Revenue Amid Budget Uncertainty
National Grid Posts Slightly Stronger-Than-Expected Half-Year Profit as Regulatory Investments Drive Growth
UK Business Lobby Urges Reeves to Break Tax Pledges and Build Fiscal Headroom
UK to Launch Consultation on Stablecoin Regulation on November 10
UK Savers Rush to Withdraw Pension Cash Ahead of Budget Amid Tax-Change Fears
Massive Spoilers Emerge from MAFS UK 2025: Couple Swaps, Dating App Leaks and Reunion Bombshells
Kurdish-led Crime Network Operates UK Mini-Marts to Exploit Migrants and Sell Illicit Goods
UK Income Tax Hike Could Trigger £1 Billion Cut to Scotland’s Budget, Warns Finance Secretary
Tommy Robinson Acquitted of Terror-related Charge After Phone PIN Dispute
Boris Johnson Condemns Western Support for Hamas at Jewish Community Conference
HII Welcomes UK’s Westley Group to Strengthen AUKUS Submarine Supply Chain
Tragedy in Serbia: Coach Mladen Žižović Collapses During Match and Dies at 44
Diplo Says He Dated Katy Perry — and Justin Trudeau
Dick Cheney, Former U.S. Vice President, Dies at 84
Trump Calls Title Removal of Andrew ‘Tragic Situation’ Amid Royal Fallout
UK Bonds Rally as Chancellor Reeves Briefs Markets Ahead of November Budget
UK Report Backs Generational Smoking Ban Ahead of Tobacco & Vapes Bill Review
UK’s Domino’s Pizza Group Reports Modest Like-for-Like Sales Growth in Q3
UK Supplies Additional Storm Shadow Missiles to Ukraine as Trump Alleges Russian Underground Nuclear Tests
High-Profile Broodmare Puca Sells for Five Million Dollars at Fasig-Tipton ‘Night of the Stars’
Wilt Chamberlain’s One-of-a-Kind ‘Searcher 1’ Supercar Heads to Auction
Erling Haaland’s Remarkable Run: 13 Premier League Goals in 10 Matches and Eyes on History
UK Labour Peer Warns of Emerging ‘Constituency for Hating Jews’ in Britain
UK Home Secretary Admits Loss of Border Control, Warns Public Trust at Risk
President Trump Expresses Sympathy for UK Royal Family After Title Stripping of Prince Andrew
Former Prince Andrew to Lose His Last Military Title as King Charles Moves to End His Public Role
King Charles Relocates Andrew to Sandringham Estate and Strips Titles Amid Epstein Fallout
Two Arrested After Mass Stabbing on UK Train Leaves Ten Hospitalised
Glamour UK Says ‘Stay Mad Jo x’ After Really Big Rowling Backlash
Former Prince Prince Andrew Faces Possible U.S. Congressional Appearance Over Jeffrey Epstein Inquiry
UK Faces £20 Billion Productivity Shortfall as Brexit’s Impact Deepens
UK Chancellor Rachel Reeves Eyes New Council-Tax Bands for High-Value Homes
UK Braces for Major Storm with Snow, Heavy Rain and Winds as High as 769 Miles Wide
U.S. Secures Key Southeast Asia Agreements to Reshape Rare Earth Supply Chains
US and China Agree One-Year Trade Truce After Trump-Xi Talks
BYD Profit Falls 33 % as Chinese EV Maker Doubles Down on Overseas Markets
US Philanthropists Shift Hundreds of Millions to UK to Evade Regulatory Uncertainty in Trump Era
×