Within four years, Hong Kong, China is predicted to surpass both New York and London as the leading global center of financial employment, a new report predicts.
The new estimates, issued by the UK-based Center for Economics and Business Research (CEBR), notes that currently, there are more than 249,500 financial services jobs in London, 254,100 in New York, and 207,000 in Hong Kong. However, the consultancy adds, London still holds the lead in "international" employment, as "many of the New York jobs service the domestic US economy."
By 2016, 262,000 financial services jobs will be based in Hong Kong, compared to 252,500 in New York and 239,000 in London. "Financial service jobs in Hong Kong – which was less than half the London number in 2005 – will have overtaken the number in London and Hong Kong will be the main international financial center in the world," CEBR predicts.
Another growth story in this area is Singapore, where financial services job growth is project to rise from 156,400 today to 192,100 by 2016.
CEBR provides a mix of reasons for the shift:
"Many of the Asian markets have gained critical mass, enabling them to take on functions and services previously carried out only in the West. Onerous regulation and taxation in the UK have also contributed. New York has declined by less than London because of the greater strength of the US economy over the European economy, which has caused financial transactions in the US to weaken by less than in Europe. But the main reason for the shift to the East is the more dynamic growth of the Asian economies, which has created a booming demand for financial services."
Of course, CEBR is basing its projections of financial service power by employment totals. Not clear from this report is the extent to which automation and electronic trading will play a role, and whether this will be suppressing job growth in London and New York, which show net losses over the next four years. Many small firms can run global operations with far fewer employees than just a few years ago, and this trend will continue.