Let's be more daring!
Hello. I'm Mike, a lawyer living in Hong Kong.
This blog has been read by more friends than I expected, and I have received several comments of encouragement and praise that are true or funny. Thank you very much. I am very grateful.
I also received a direct message from one of my friends who is the head of a European fund in Japan. According to him, Japan is much less cosmopolitan than New York, London or Hong Kong, not only because of the lack of English, but also because of the lack of tolerance for non-Japanese people, and even he, who is half Japanese, still feels discriminated against. He goes on to say that with income tax taking up more than half of the income in Japan, we should assume that foreign talent will not come to Japan in the first place. He went on to say that there is no point in doing anything small, and that there is still a chance if we make drastic changes to the tax system.
I will refrain from writing specifically about his recommendations here, but I did have a chat with him about them. Japan is a great country to visit for tourism, but as a financial business hub it is far inferior to Hong Kong in every way. I don't know how long it will be before Japan's "internationality" is up to Hong Kong's level though. If we really want to make Tokyo a true financial hub, we must at least make bold tax changes to make it as attractive as or more attractive than Hong Kong. Only then might we be on a level playing field with Hong Kong. He and I were 100% in agreement on these points.
New York, London and Hong Kong are all international financial centres, but they are different.
New York is the centre of the world's largest country, the USA, so asset managers come to New York to manage assets in the USA. Focusing on assets located in the US AUM ("assets under management") should be made up mainly of assets located in the US. The US probably thinks that the whole world is the US. This is a little bit off topic, but when I work on international transactions, I feel that the US thinks that it is the world and that its laws apply to the whole world. Even when you are drafting a global contract that is not specific to the US, you will find yourself in many situations where you have to include special clauses for US law. The US is the world and the world is the US. So New York is the centre of the US and the centre of the world, and the assets managed there are considered to be the assets of the world.
London, on the other hand, is different. Until the 18th century, before the Industrial Revolution, the British aristocracy was prosperous and the wealth of the world was concentrated in England. It was the centre of the world, just like New York is today. However, while the aristocracy declined, capitalism developed, and in this century, in addition to the internationalisation of institutional investors, there was a revolution in information technology, and finally in 1986, a major reform called the financial Big Bang was carried out. This opened up the London market as a platform to the rest of the world and created a place where funds from the UK and abroad could be invested in assets from the UK and abroad. So London is home to more foreign financial institutions and their financial talent than it is to British financial institutions. Wimbledon.
Hong Kong is the same as London. Hong Kong is a region with no industry, so we are opening up Hong Kong as a platform and providing a place to gather assets from all over the world, especially from Asia, and manage them around the world.
TOKYO IS ALSO A FINANCIAL CITY, AND IN 1990, WHEN JAPANESE COMPANIES WERE DOMINATING THE WORLD'S CORPORATE RANKINGS, THERE WAS TALK OF JAPAN AS NUMBER ONE AND THE BELIEF THAT JAPANESE MONEY WOULD TAKE THE WORLD BY STORM. THIS IS NEW YORK TODAY. NOW, 30 YEARS LATER, SOME PEOPLE THINK THAT IF WE INVEST OUR MONEY IN JAPAN AS AUM, WE CAN REPLACE HONG KONG AS A FINANCIAL CITY.
No, it is not. It's a big mistake and a big conceit. Japan is now a country in decline. We need to become a Wimbledon type financial city like London or Hong Kong, not a world centre like Japan or New York. We need to become a Wimbledon-style financial city, like London or Hong Kong. Drastic reforms need to be made with this in mind. We need to be a Wimbledon type financial city, like London or Hong Kong.
I have a bold proposal that I've been thinking about for a long time, and I'll share it with you next time. See you next time.
