Hong Kong has become the world's largest center for cross-border capital management, displacing Switzerland in second place, the Financial Times (FT) reported, citing the Boston Consulting Group (BCG).
According to experts, the volume of offshore assets in the special administrative region of China has reached 2.95 trillion. USD. In Switzerland, the same figure was 2.94 trillion. USD. According to BCG, thanks to the faster growth of Asian financial institutions and wealth in the region, the asset gap between Hong Kong and Switzerland will increase to $600 billion by the end of the decade.
According to the publication, Hong Kong's transformation into a cross-border center reflects broader changes in global wealth flows: clients are seeking to spread their assets across multiple jurisdictions to protect themselves from geopolitical tensions, sanctions risks and political instability.
Michael Pellmann Rowland, a representative of the Swiss independent asset management firm Baseline Wealth Management, called it a “completely new phenomenon”. Wealthy clients moving money abroad have traditionally been driven by tax planning or corporate structuring, but since the coronavirus pandemic they are increasingly seeking “jurisdictional diversification” – allocating assets across countries to protect themselves from risks, the expert explained.
According to BCG partner Michael Kalich, diversification has contributed to the strengthening of the dominance of the world's largest "accounting centers" - centers where banks manage and protect offshore assets for international clients. Hong Kong and Singapore now form the core of a unified network in Asia, while Switzerland, the UAE and the United States form a competitive axis in the West, the expert noted.