Global financial centres: where hustle’s the name of the game

The hustle, said Fran Lebowitz, is not a new dance step, but an old business procedure. Undoubtedly so. The question, as London, Hong Kong and Tokyo near the halfway point of 2022, is which beleaguered global financial centre has taken this analysis most closely to heart.

London, certainly, is looking hungry. Last week, the FT reported the UK government’s intensified efforts to convince SoftBank founder Masayoshi Son to list the British chipmaker, Arm, on the London Stock Exchange.

The details of the latest carrot efforts at suasion — and of the faintly sinister “stick” strategies that for now remain in the back pocket — are revealing. Son was unambiguous back in February when he first said publicly that the Nasdaq exchange in the US was the most suitable, tech-centric venue to list Arm.

People close to the company separately confirmed not long afterwards that the UK’s lobbying efforts were making no impact on SoftBank. Now, at least, the possibility is under consideration.

One interpretation of the recent escalation is that the turbocharged UK campaign is desperate and defensive. A London listing for Arm would stand as a multibillion post-Brexit counter to those who fear the City’s hunger turning steadily to emaciation. The failure to persuade SoftBank to list a crown jewel of British tech in its country of origin would invite difficult questions about whether any global tech giant could ever be enticed to the LSE again.

Another interpretation, though, is that irrespective of the stakes, (and they do not come much higher) this is exactly the kind of hustle — raw, inventive and relentless — that builds and maintains the most competitive, serious financial centres. Whether it works or not this time, the effort itself is the brand.

In Hong Kong, meanwhile, there is effort of a different, no less desperate-looking variety. For the past two years, the city has been unable to staunch an outflow of tens of thousands of residents and been forced to watch as Singapore in particular has received a steady transfusion of its financial industry’s lifeblood. Draconian anti-pandemic measures — long quarantines foremost among them — have been the immediate trigger for people across the financial industry to leave.

But many had already arrived at the view that Hong Kong’s appeal was in inexorable decline. The challenge to Hong Kong’s financial hub pre-eminence in Asia began well before Covid-19, as Beijing’s leash on the city began to tighten in increasingly visible ways.

Plans to stop or reverse this drain involve a grand spectacle — a symbol, says the Hong Kong- based Asia head of one of the world’s biggest investment funds, that the territory is not going to surrender its status without a fight worthy of what is at stake. According to local media reports and others familiar with the plans, Hong Kong is intending to convene a summit that involves enticing scores of the world’s top bankers to a city almost none have visited since early 2020.

Many Hong Kongers are deeply ill-disposed to the authorities and the high-voltage debate over whether the visiting grandees will be granted exemption from the quarantine rules, will crackle with animosity. But here again, the steamroller-like optics of the project are at its core. The purpose (though it will not be formally couched as such) is to demonstrate an almost fanatical commitment to being a global financial hub. The staging of that performance requires heavy machinery.

Both Hong Kong and London’s efforts are playing out against the near constant blaring of Tokyo’s own ambitions as a global financial centre. Few claimants to this status have been as noisy in their statement of intent, as secretly squeamish about what that status really means, or as blithely unrealistic about its chances of success. Tokyo — and there should be no condemnation for this — likes the idea more than the reality. Behind the melodic appeal of a gorgeously liveable city, raw economic size and a decent talent pool is a raspy misconception of what actually turns cities into inexorable centres of financial gravity. There is no shame in not wanting to be a hub, and it may be time to stop pretending otherwise.

Crucially, London and Hong Kong are, in plain sight, telling Tokyo exactly what it is doing wrong. Japan relaxed its quarantine rules months ago to the point where business visitors can breeze in. Despite that advantage, it has come nowhere close to hosting a defining, post-pandemic rebirth-of-banking event in Asia. At the same time, its attempts to convince SoftBank — a Tokyo-listed, Japanese company — to list Arm in Tokyo are invisible to the point of non-existence. Two huge opportunities for Tokyo to prove its ambitions beyond doubt, but both squandered for lack of hustle.

leo.lewis@ft.com