The Starting Point of Hong Kong's Capital Market on the Global Stage
In the 1990s, many of the world’s largest companies by market capitalization were mobile phone or telecommunications firms. In comparison, China Mobile appeared particularly attractive in terms of both valuation and potential. Looking back today, this marked the moment when global capital began to realize that the Hong Kong stock market was truly worthy of attention.
Author: GUDORDI | 2026-04-09
禍兮福之所倚，福兮禍之所伏。
──《老子．五十八章》
In the previous section, I mentioned that the listing of China Mobile was a major milestone in the development of Hong Kong’s capital market. I hope to use this historical background to highlight several of the most critical variables that will determine the future of Hong Kong as an international financial center.
The Era of G7 and G1 Dominance
G7 (Group of Seven) and G20 (Group of Twenty) are terms frequently seen in the media today, and we can use them to deconstruct the development of the global financial system. Strictly speaking, the origins of this system can be traced back to 17th-century Holland; however, from the late 18th century onward, Britain replaced Holland as the dominant leader of its development.
The two World Wars severely damaged Britain and Europe, leading Britain to realize that the entire system could no longer be sustained. The only way forward was to establish the United States as its guardian. Consequently, Britain employed various methods to ensure U.S. intervention in the wars and to prevent it from returning to isolationism afterward, even leveraging U.S. national power to help drive global trade and economic recovery. From this perspective, the global financial system entered a new phase after World War II that can be described as “G1,” as the entire system revolved around a single nation: the United States.
Subsequently, the economies of Western Europe began to recover and Japan’s economy started to emerge, but overall, the foundation of the global economic and financial system remained very narrow. Theoretically, there are over 190 countries in the world, but in the late 1980s, the G7 remained overwhelmingly dominant. It is worth noting that the global industrial structure can be viewed as a five-layer pyramid:
Trade and Resources (Base)
Industry
Services
Banking
Finance (Apex)
The higher the industry’s position on this pyramid, the fewer participants it can accommodate.
The Continued Dominance of the Financial Layer
Looking back, a major shift in the global economic and financial system occurred in the early 1990s when nearly all former socialist countries transitioned to join the Western-led global economic framework. China was, of course, the most prominent among them, but other nations with significant populations and economic scales—such as India, Russia, and Brazil—also began to develop within this system.
It is noteworthy that after more than 30 years, while the G7’s previous dominance has been broken at the levels of global trade, resources, and industry, the barriers at the financial level persist. In fact, it remains largely stuck in the “G1” era. I believe this context is an indispensable factor and challenge to consider when evaluating the future prospects of Hong Kong as an international financial center.
金融層面的壁壘仍持續。（Shutterstock）
Global Capital Still Concentrated in Developed Markets Like the U.S.
Although Asian emerging markets held significant appeal within the global investment community for a time, strictly speaking, they never truly became part of the mainstream. This is not difficult to understand, given that more than half of the world’s equity investment capital originates from the United States—a country where more than half of the population does not even hold a passport. For many American investors, the opportunities, volatility, and depth of their domestic market are more than sufficient; unless the prospects for the majority of U.S. companies look dire, there is little perceived need to venture abroad.
Consequently, regardless of how much capital has flowed into Asian stock markets in the past, approximately 80% or more of global equity investment capital remains concentrated in the U.S. and a few other major developed markets. This was particularly true after the Asian Financial Crisis, which led many in the West to view Asia’s previous prosperity as a mere facade fueled by “Crony Capitalism.”
While the “BRIC” nations theme later managed to capture attention for a period, it ultimately failed to break the limitations of global capital allocation patterns. Therefore, for the Hong Kong stock market to truly break through, it required a world-class investment narrative and theme to support it. This further highlights the profound significance of China Mobile’s listing in Hong Kong.
The Listing of China Mobile: The Beginning of Hong Kong’s Ascent to the Global Stage
Looking back today, the timing of China Mobile’s listing (October 1997) was somewhat awkward, as it coincided with the outbreak of the Asian Financial Crisis. I recall that the initial market response was not particularly enthusiastic. However, over the following year or two, the market’s regard for China Mobile rose steadily. This can likely be attributed to three main factors.
First, for capital traditionally invested in Asian equities, China Mobile was an easily acceptable target, primarily because its core business was simple and easy to understand. Secondly, the investment banks at the time tailored a “packaging strategy” for China Mobile—starting with the two strongest provinces and gradually injecting others—which was very well-received by the market. Most importantly, telecommunications companies were the darlings of the global stock market at the time. Many of the world’s largest companies by market capitalization were mobile or telecom firms; compared to these global giants, China Mobile appeared highly attractive in terms of valuation and growth potential. Looking back, this marked the beginning of global capital viewing the Hong Kong stock market as truly noteworthy.
Subsequent developments saw national policies align with market growth, and Hong Kong gradually became the primary listing destination for Chinese enterprises. This caused both the scale and the diversity of overseas capital entering the Hong Kong stock market to climb continuously. However, this development is both a strength of Hong Kong’s capital market and its hidden concern—a point I will discuss further.
