Hong Kong vs New York - the war is on!!
Allright. Let's cut this diplomatic b/s out. We all know that in the next 20 years, the years when our careers will either be made or lost, another more important contest will be playing out : HK vs. NYC in the battle for global financial capital supremacy.
Now, I can think of a many, many reasons for HK eventually not winning - correct - these would also be the reasons for NYC winning. But there are also a few compelling reasons that may push HK over the line.
My money is on NYC, despite agreeing that the global wealth reserves will shift to HK/China.
USA , USA!!
Any thoughts?
London? Sorry you were once great, but we are well, well past the industrial revolution.
HK vs. NYC.
As someone born and raised there for a good decade and some, and now a U.S. citizen, it seems to me that the expanding influence on which mainland China is placing on the H.K. S.A.R. will continue to render it unable to fulfill what it had once promised in the late 90s and 00s. Granted, the other side of the token is that it provides a link to the mainland China as a "free market", but as the Chinese continues to place a greater emphasis on other "mainland" cities such as Shanghai and Shenzhen to prosper, it leaves one to wonder what exactly will continue drive H.K.'s economy, barring its pegged currency to the dollar and relatively "free" economy compared to the mainland.
Furthermore, the political climate and sentiments there are quite feverish and not exactly healthy to the local and regional economy. Hong Kong in the early 2000s was arguably one of the best places to live and work in, a de facto global financial capital, but I personally feel that the short-term future is not too bright.
I like your answer, you seem to make the point that HK will be stymied due to its proximity to the Middle Kingdom. But I'd argue that it's this proximity itself which is HK's great, if not greatest, strength. Views?
I don't think he is disputing that - it is just that in the past few years, China has been exerting its influence over Hong Kong in a way that has become increasingly concerning for a lot of native Hong Kongers.
If you read some articles on the current political situation as @Eldra" mentioned this will become more apparent, but for one example, there have been several cases where people have "disappeared" only to reappear in the hands of the security services in mainland China.
+1 this is the widespread opinion among long-term expats in HK
As much as I would like Hong Kong to win (I really love the place even outside of finding a job and I don't ever plan on leaving the place), I just feel there is way too much competition in the APAC area so to say. Singapore is catching up/has already caught up significantly, Shanghai and Shenzhen have a lot more direct support from the government, Tokyo might have a second chance (even though I kinda doubt it).
BUT, the question was about who would become the leading global financial centre. Soft power factors such as english, rule of law, ease of migration, listing rules etc. are all in play here.
HK's financial system will likely have more capital, but will companies raise capital there or raise in NYC? If Alibaba is anything to go by then: NYC FTW!
Tokyo - best city in the world, in my view, but due to Japan's xenophobic non english speaking ways can never ever be a global leading finance capital - i.e. number one overall.
Singapore is too small and too regulated.
Shanghai should be in the mix then, NYC > HK> Shanghai
I would say you're focusing too much on Asia. I'd argue that London will not fall behind a secondary Asian city like Shanghai in our lifetime, due to existing infrastructure, intellectual capital (universities and nonfinance professionals), and English-speaking multiculturalism (English, but also like every nationality in the world)
It is simple, where would you prefer to park your assets (from a developed country perspective ie US, Europe, considering that is where 60%+ of the world's capital is)? New York every day.
New York FTW!
New York is the center of the fucking universe!
Maybe Theresa May could.... wait for it: "Make London Great Again!" Ha
Hong Kong has a very slim chance of staying Asia's financial capital. NY's role is more entrenched.
If you've ever had experience in both regions then you know there is no "war". NY is far more dominant, HK is a systemically important satellite in Asia, not a contender for NY's spot.
Even if China grows to define financial and economic activity in the future, HK has to face down against Shanghai, Beijing and Shenzhen, each city having a very strong case for the crown.
Can really second this - worked in NYC and currently in HK. There is no war, not even close. New York will be the number 1 financial center in the world, past, present and also in the future years to come. Arguably, I'm still in the age band where I think NYC is far more superior and fun when it comes to having a social life and good street mood. Hong Kong is frustrated - it doesn't have the full support of Chinese government, it is too small geographic wise and yes, Hong Kong locals are frustrated and the younger generation is frustrated - astronomical housing prices and low stagnating wage growth. What's an average undergrad making in HK vs. US nation wide vs. NYC? How about housing price? You figure it out.
In terms of the financial industry today, foreign banks are being ripped away by Chinese competitors and securities houses in terms of business and "the way things work in China". Less knowledgeable people when it comes to how money can be made overall. Less fun (please don't shout LKF - it's a shitty street, empty clubs and run down bars with lots of third worlds tourists puking on the street vs. Hells Kitchen, Meat Packing and some of the nice rooftop bars in NYC? No just no).
Even if the Greater China region gets bigger than North America, HK will not surpass NYC. Why? Because no other city in the US comes close. On the other hand there are just so much more competition in the greater China region, HK vs Shanghai vs Beijing.
Thoughts on NY vs. HK (Originally Posted: 02/22/2007)
To be honest, I have friends who choose to work in HK as the tax rate is lower vis a vis New York.
That being said, the prestige working in NY is higher than HK. A common and prevalent perception is that you make a better banker working in the headquarters. That may not necessarily be true, but perception is not often grounded by science.
Most people apply to both HK and NY to maximize their chances of getting into banking. But those people who apply to NY more often than not used HK as a hedge - just so that they can at least get an offer.
somecdndude, i think we spoke before on this board about the prestige rankings, and you went on a tirade about how you preferred to be a Board of Director of BofA vs. Goldman, using market cap as a benchmark. I'm not trying to judge in this post, but I see a trend here in your argument, on how you are using (in point form no less) reasons to back your claims up. Nothing wrong in that, but I'm afraid perception is not a logical thing, and it does not matter whether if public listings are shifting to HK because of SOX or any reasons else. At the end of the day, people know deep in their hearts where the real deal is. That's why NY is still a preferred spot with perceived higher prestige, if that's what they care about.
I worked for a top BB in HK and decided to come back for full time. Here are my 0.02 about HK vs. NY debate.
1)compensation: HK pays much better with 15% income tax for non-Americans and substantial housing allowances.
2)prestige: NYC is better in prestige, but whether one could get into a firm as prestigious as that of HK might be questionable. In most times, HK-NY candidates have to chose between GS/MS HK vs. JPM/Citi NYC so the candidates need to decide if they prefer the prestige on the location or on the firm.
3)senior exposure: analyst cohort is smaller in HK, and thus analysts could have more opportunities working directly with senior people to network within the organizations.
4)responsibilities: analyst cohort is smaller and deals are abundant so sometimes one might take significant responsibilities in a deal team.
5)long term career prospect: banking is all about building relations both in and out of the organizations and generating revenues from these relations. If one has the cultural/ethnical/language affinity to one region, why not just go and cash out the comparative advantages as the Asian market is still hot
6)cultures: In HK, not everyone is from Westchester County or New Canaan, CT, so one needs not to fit into certain cultural stereotypes to feel comfortable or be popular in the organization.
7)family & friends: if your family/friends are in the region, then definitely HK is the choice closer to home.
8)Full time prospects: HK bankers are not stupid and HK values a lot on the long-term commitment to the region; the least thing they want to see is that one received an HK offer and leverage that for NYC ones. The firm management will constantly evalue a candidate's likelihood to stay in the region and consider the commitment to Asia as an important factor for giving out full time offers.
The bottomline is that if one has the cultural/ethnical/linguistic/family connection to the region, then Asia Pacific is the good place to start, and if one merely treats the region as the stepping stone or lacks understanding of local culture then HK is not a fit.
hey man, I really liked what you said regarding HK and NYC. It is quite a dilemma for me to pick between the two. I have a strong Asian background as my close relatives are still in China. Yet I consider myself quite white-washed and I've always planned to work in the States simply because it excites me more. I know that this is probably a very narrow minded thought because I actually have never been to HK and don't really know what it's like there, but I've always thought that I might not really fit into true Asian culture. For example, here at school, most of my friends are Caucasians or true ABC's.
then you would better not pursue internships in HK or pretend to be committed to the Asian market. HK banks would not extend full time offers if that only serves as the leverage for NYC ones, regardless of how hard you work--and that could be detrimental.
To Bullish:
Before I get into the HK vs. NYC discussion, I would like to clarify some issues.
First, it is the issue of prestige. YES and ABSOLUTELY, I agree that prestige is important and I do live and believe in that. I also agree that prestige may not a very logical argument when it comes to it but in reality, perceptions – and not necessarily logic – may matter most. To add some credibility to my writings, I did end up at one point in my career having to choose between a “less prestigious†opportunity vs. “a more prestigious†opportunity in investment banking and I chose the latter, even knowing that my quality of life in the “less prestigious†firm would be better; hence, it would be foolish of me to argue against myself to say that prestige is not important.
I think many individuals have misread me for the previous post when I compare BoA vs. Goldman Sachs (which somehow extended to Ford vs. Ferrari). My intent of that post WAS NOT to argue that BoA is a better than GS/MS/ML/etc. but rather to point out to current prospective job seekers / students to think a little broader; that is, try to maintain a bigger perspective on your own career and life, rather than get too wound up on the often "groupthink" mentality on this forum. I hope that is clear. To be even more clear, I have no doubt in my mind that a GS is a much better firm / job / responsibility / exposure / etc than any BoA out there.
Now that's settled.
I'll point out something issues that I agree and disagree, or want to amend to in the previous posts: (those who read what I write from time to time would notice that I love to use bullets)
(1) In terms of "prestige" (and just measuring it based on that sole factor), I would AGREE that NYC would give a better prestige than HK -- simply because decades of corporate finance activity have been done out in NYC. At the end of the day, HK belongs more to the mature market (from existing HK corporations) + emerging market (from China and perhaps surrounding Southeast Asia countries) group.
(2) juliansyin – I agree with 99% with what you wrote in terms of comparing HK vs. NYC. Perhaps I can amend to that. The senior exposure and responsibility in HK are definitely greater than what is offered in both Toronto and NYC (and perhaps even more so in NYC due to the “analyst army†style of recruitment).
On an absolute numbers basis, there will be “more deals PER FIRM†in NYC than HK. However, on a relative basis, each analyst would be assigned to “more deals PER ANALYST / HEAD COUNT†due to the small team nature of HK.
For long-term career prospects, I notice that many individuals talk about exit opportunities into the buy-side. I think juliansyin has addressed the career side of sell-side quite well. In terms of buy-side, a lot of American / European PE shops are being set up in HK / Beijing / Shanghai right now to leverage the opportunities there (read: KKR and the likes). However, unlike the American PE environment, PE in China is still fraught with regulatory hurdles (read: PCCW deal).
As for myself, this is what I think: -There’s no doubt in my mind that I will one day work in NYC because, like Bullish and many people on this board, NYC still has that “Big Apple†prestige factor. However, I reason that it would be VERY DIFFICULT to move from NYC > HK than vice-versa. Perhaps I am wrong but this is how I reason it --- as an individual of Chinese descent, the longer I stay away from a Chinese speaking and Chinese culture environment, the greater the chance I will lose it. Hence, if I work in an NYC investment banking environment, I would be assimilated into that NYC banker culture, which clearly would not work in HK / China. However, having educated in a Western society, it is quite easy for me to work in HK, get the exposure there and adapt right back to the NYC culture.
-Would I be interested in leveraging my Hong Kong + Toronto investment banking experience into NYC and/or London? Hell no. Think long term guys. Whether it be in investment banking or exiting into other opportunities in the future, your greatest asset is your contacts and a huge part of it is the trust that you’ve earned with them. Do you really want to be perceived as a guy with no loyalty whatsoever? Sure, you’ll jump ship trying not to burn any bridges but in reality, can it really be done so smoothly? In my eyes, a “bank jumper†is not exactly a person I’d place a high level of trust upon.
My two cents. Comments welcomed.
I think you overestimate the firm's ability to know each intern's intentions.
How do you think a firm differentiates between interns who want to stay in HK, and those who want NYC after college. Does it say right on their name tags?
they can easily do that although such practice is not absolute.
nationality: Americans (PR and citizens) are paid less on an after-tax basis (or comparable to that of NYC) compared to their non-American peers. Thus staying in HK seems to be a lesser logical choice given compensations were much more the same in both places.
language capability: if one sucks on mandarin speaking or general chinese writing, s/he ain't gonna have an easy time in APAC investment banking scene.
In HK is higher because there is a $25k yearly housing allowance (given as cash), in addition to NYC salary + bonus. I think hours are worse, exit opportunities also not as good. Most people tend to stay in banking, rather than go to HFs or PE.
A lot of you have very limited perspectives. The view at the MBA level is very different. You go where you want to live and start your life. I went to a top MBA program and I have NEVER heard anyone debate ML HK vs. GS NY for prestige. It means nothing. The question is where do you want to live and work.
skins1, which MBA program did you go to?
To skins1:
I agree with you and thank you for putting a more positive / broader perspective on this forum.
hey somecdndude, I private messaged you.
Ever heard of Brexit? London is already a money laundering machine as is - removing the European shackles of oppression will allow it to thrive even more! Arab, Asians, Europeans - they all flock to the UK to park their cash. That's one aspect - Now banking? It's going to be a tough one as both the US and the UK will start deregulating in a near future. Hong Kong, meh... It's had a massive boom, and now it's just slowing down. My money is on London - Internet technology bull shit, there is a reason why all the startups are in SF, proximity still matters. I need to be close to Mayfair to sell and do deals or whatever equivalent there is in NY or HK
Compensation - NY vs HK (Originally Posted: 10/19/2006)
Hi,
I am wondering if there is an important difference in terms of compensation between NY and HK, I precise that my entry level would be "associate" as I am now a MBA student. Anyone can help here ? I have no idea about HK payroll...
Base compensation for Bulge Bracket IBs would be the same - global pay scheme. Although bonus might differ slightly.
i thought they will be different(?). is Bullish talking it's same when relocating to HK from US office? i think starting for HK analyst is HKD$40k to $50k / mth. (exchange rate 1USD = 8 HKD approx)
not sure about associate.
Pay will be the same for HK analysts working in a bulge. If you are getting USD$60K base in the US, you will get that equivalent in HKD. The global pay scheme goes for other places as well such as London and Singapore.
HK is a great place i would think to work. sorry dont know much about World Wide pay scales
Do they have Chipotle in HK? God I love Chipotle.
Asking the important questions here
HK will always be around because it's a place for corrupt and wealthy chinese to park their offshore cash and for outbound investment. As for mainland China itself there is a lot going on in terms of innovation and whatnot but on the financial side capital outflow restrictions are becoming more and more severe, partly because the government doesn't want a rapid outflow of money a la 1998 Asian Financial Crisis and partly because they want to encourage rich chinese people to invest inside the company and create jobs. I don't think Shanghai and Shenzhen will become offshore banking hubs for this reason. Read the book asian godfathers by joe studwell and it talks about how HK and Singapore are money laundering hubs for corrupt government officials and other rich chinese and that they are the driving factors behind the upsurge in luxury real estate prices. I will say that HK will become more and more chinese as the clients are becoming more chinese (HNWI, various mutual/hedge funds etc.), which means less jobs for expats with yellow fever. If you look at the jobs on efinancial careers and whatnot you'll see that chinese financial institutions are on hiring sprees; foreign investment banks not so much the case
In terms of foreign banks active in the mainland in Shanghai it's still mostly a hub for commercial banking and back office IT for investment banks. Some firms like UBS are more local and setting up equity research teams there for A-shares access, but if you're a foreign fund investing in China you still have to trade through the HK stock connect, and so for secondary markets HK is still the place to be. Even then chinese government doesn't want foreign investors to buy up too much A shares and have control over state owned chinese companies, so quotas and limits will be around for some time and HK will be the place for outbound/inbound fund flows
x
Basically what highhater said 8 years ago lol, except the entire catalyst just accelerated - shifted to more Mainland-based clients so Mandarin is a must have skill now.
Thanks to Covid & China's approach to Zero Covid Policy, National Security Law and the current CCP control over HK, expats have left and firms have hired more students from Chinese universities. If you don't know Mandarin and have the cultural conformity towards Mainlanders, don't bother with HK IB.
HFs/ S&T in HK are another case though, not too sure myself but pretty friendly to hiring non-Mainland guys due to lack of client interaction.
Hong Kong died when the CCP took it over fully. The city is going through its motions but nothing of any major importance with regards to finance is going on there.
HK saw 64 IPOs last year valued at a total of $10.7bil. That is more than 10x the value of London's IPOs. The city is still is the most developed capital market and wealth management hub in Asia. Sure, HK has seen better days pre-2019, but it is a bit far to say that "nothing of major importance" happens in HK.
Of those 69 firms I think it was 35% - 40% were Chinese firms that delisted themselves from US exchanges due to the fact that regulators were going to begin enforcing GAAP filing for these companies. It is insane to me that a Chinese firm can list on a non Chinese exchange and just blatantly violate accounting reporting standards.
Additionally the growth in non China firms listing on the HKEX is abysmal. There has been a general slow down in IPO listings in the West due to the ever increasing lengths that growth companies are staying private as well as the ever increasing interest in private market capital providers to allow for this. I give in 10 years and the HKEX will be made up of 95% Chinese firms and 80%+ Chinese capital.
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