Hong Kong and London can both succeed and prosper if they forge close ties and are open to competition and new ideas, British Economic Secretary to the Treasury Ed Balls said Wednesday.

 

In a speech to business leaders, Balls said that the emergence of major financial centers like Hong Kong will not threaten London's place in the global economy. Instead, the two cities will benefit much from strengthening partnerships.

 

"It is not by chance that Hong Kong is now the home to the region's largest fund raising and management center, the second largest stock market and the third largest banking center," he said.

 

Hong Kong has benefited greatly from the phenomenal economic growth of the Chinese mainland and has served as a gateway for mainland funds to be invested overseas, he said.

 

The special administrative region of China attracted more IPOs (initial public offerings) than anywhere else bar New York, both in terms of value and number of transactions in 2005, with all of the top IPOs coming from the mainland.

 

"And all this before the planning Hong Kong-listing of the Industrial and Commercial Bank of China, expected to be the largest the world has ever seen," he said.

 

He dismissed the fear held by some in Britain that increased international competition would slowly erode London's stature as a geographical financial services cluster.

 

"In fact the opposite has been true, London has not stumbled, but prospered," he said.

 

There are now 160 Hong Kong companies investing in Britain. Hutchison Whampoa alone has assets worth 14.7 billion pounds in the country, employing more than 27,000 people.

 

Major Chinese companies such as Sinopec and Air China are listed both in Hong Kong and London stock exchanges, the latter raising 558 million pounds in 2004, he noted.

 

"Let us agree today to work together through a strengthened partnership to ensure London and Hong Kong will grow and prosper together in the years to come," he told the business leaders.

 

Balls is on a two-day trip to promote the City of London interest in Hong Kong before he flies to Indonesia on Thursday.

 

(Xinhua News Agency September 14, 2006)