The Greater Bay Area development zone can be a growth engine for Hong Kong accountants, according to the newly-elected president of their industry body.
The sector has been hit hard by the economic dislocation caused by the coronavirus pandemic, with some firms freezing hiring, asking staff to take pay cuts and scrapping bonuses. The Hong Kong Institute of Certified Public Accountants, which represents the city’s more than 46,000 accountants, has set up a committee to study how seminars, tours and other projects could help small firms and accountants grow their business in the Greater Bay Area.
“The Greater Bay Area shares Hong Kong’s culture and language. Many companies in the development zone would like to hire accountants from the city because of their international experience and network,” Raymond Cheng Chung-ching, the institute’s president, said.
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The city’s accountants could benefit from Beijing’s push to integrate Hong Kong with the other cities in the development zone. On Friday, the city’s bourse operator was given the go-ahead to invest in the newly set up Guangzhou Futures Exchange. The same day, regulators also signed a memorandum of understanding to prepare rules for the soon-to-be launched Wealth Management Connect scheme.
Moreover, China’s top banking regulator vowed last month to open up the zone to Hong Kong companies in general. “We will provide greater market access to firms from Hong Kong to facilitate their development,” Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission, told a online forum in Hong Kong.
Cheng said opportunities in the development zone were important for Hong Kong’s accountants because of the city’s economic crisis, and that they could easily provide non audit services in the Greater Bay Area.
Hong Kong accountants that do not have mainland Chinese qualifications could provide consultancy services in areas such as business development, forensic investigation, background checks, due diligence and advisory services to help companies list in Hong Kong, Cheng said. They could also apply for these qualifications or team up with mainland firms.
“The Covid-19 pandemic, which has led to a suspension in cross-border traffic between Hong Kong and the mainland because of quarantine requirements, has also led many Hong Kong accounting firms to plan for partnerships with mainland firms to serve clients across the border. It will become a trend,” he said.
Himself a veteran accountant and chairman of HLB Hodgson Impey Cheng Limited, Cheng has helped many companies list in Hong Kong. The city has been the world’s largest initial public offering market seven times in the past 12 years. Last year, it was the world’s second largest IPO destination after Nasdaq.
He said besides the many start-ups in the Greater Bay Area, companies from other parts of China were also expanding in the development zone, and that these too could be potential clients for Hong Kong’s accountants.
“Hong Kong has a very active capital market, which attracts many mainland firms to come here to issue stocks and bonds. Hence, the demand for Hong Kong accountants is huge,” he added.
The city’s economy shrank 3 per cent in the fourth quarter, resulting in a full-year decline of 6.1 per cent for 2020, thanks to the coronavirus pandemic, according to advance estimates released by the Census and Statistics Department recently. This is worse than a 5.1 per cent decline in 1998, when the Asian Financial Crisis battered the local economy.
In this setting, the Greater Bay Area, with its combined population of 72 million people and an economy estimated to be worth US$1.65 trillion in 2019, could prove to be the promised land for the city’s accountants.
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