Seoul bids for Hong Kong’s crown as Asia’s financial hub | Business and Economy

Seoul, South Korea – When Alex Short was offered a vacant office space to secure his fintech location in Seoul’s financial district, he jumped at the chance.

For Short, whose original PerformID enables online shoppers to recoup cash and other benefits, South Korea has become a popular venue for its business because of its sophisticated technology and expertise.

“I think it makes sense to form a group there even if we are working with foreign banks,” Short said at his Australian home. “It meant that two employees living in Seoul had a place to work. We plan to expand the office in the coming months.”

“I think the Korean market, especially the digital market, is much more advanced than it is in Australia and the US,” added Short, whose start-up was a woodworking workshop in Seoul’s Yeouido state run by Seoul Fintech Lab. , an accelerated program sponsored by the Seoul Metropolitan Government, since July.

The performance of PerformID betting in Seoul comes as South Korea’s capital pushes for Hong Kong and Singapore as the Asian economic capital.

As part of a bid to become the “Asian Economic City”, the city government earlier this month announced plans to spend $ 241.8 billion ($ 204.4m) over the next five years on incentives such as employment assistance and rental assistance to attract foreign companies. Seoul Mayor Oh Se-hoon has promised to turn the city into one of the world’s largest economic centers by 2030, with the aim of raising foreign investment three times to $ 30bn and attracting 100 foreign financial institutions.

Seoul’s ambition to become an economic center since the early 2000s, when former South Korean President Roh Moo-hyun promoted the vision of the capital as an economic capital in Northeast Asia.

But the city’s ambitions have gained momentum recently amid questions about the future of Hong Kong, a major business and economic sector, following the establishment of Violent national security law and strict “zero Covid” policy that compels many immigrants to live in isolation for 21 days..

“It was an unprecedented idea for the global financial crisis in 2008,” said Kim Hansoo, a researcher at the Korea Capital Market Institute. “The Korean government saw it as a source of future development as Korea’s manufacturing sector was challenged by other developing countries.”

Yeouido County has not yet launched Seoul’s efforts to attract foreign companies [File: Woohae Cho/ Reuters]

Seoul, however, is facing many obstacles to achieve his vision. Compared to Hong Kong or Singapore, South Korea suffers from labor markets, tight rules, high taxes and a lack of spoken English.

“Korea still has a foreign exchange policy, no major economic city or country oversees their foreign exchange,” Kim said. “The taxes in Hong Kong and Singapore are even better. Korea is similar to big cities like New York or Sydney.”

In the latest Global Financial Centers list produced by Z / Yen Group, Seoul ranks 13th, climbing three places since last year, but behind cities including Hong Kong, Singapore, London, New York, Paris, Shanghai and Beijing.

Yang Jiyoung, chief financial officer at Korea Hub Korea, South Korea’s finance department responsible for the city’s development, said Seoul hopes to benefit from the uncertainties in financial institutions such as Hong Kong.

“Some areas that are experiencing unrest at the moment, such as Hong Kong and China,” Yang said. “Some companies are considering leaving.”

Mr Yang said the city has a “bright hope” and is counting on its strengths in innovations that are part of its strengths, especially in the financial and technical marriage, known as fintech.

“We are in the midst of our fifth financial plan. We are very focused on financial management and fintech, and we have put a lot of effort into fintech, “said Yang.

“Perhaps about 25 percent of the plan focuses on fintech, and it’s one of the big things we want to develop. The concept of a financial environment will change.”

‘Best in the World’

Some doubt that Seoul has a chance to compete with Hong Kong.

Andrew Collier, executive director of the research firm Orient Capital Research, said Hong Kong provided “the best in the world” with its proximity to China as well as legal imports from Britain.

Despite the introduction of the anti-national security law last year, Collier said banks and financial institutions will continue to work with the city as long as agreements continue.

“You don’t even want laws in Hong Kong, you just need the rules of the union,” Collier said. “I don’t think Seoul has a lot of chances to compete for action.”

In short, Seoul’s future looks bright – not because of its role in advancing technologies including mobile phones and 5G.

The oval-shaped glass house with PerformID recently added two additional office spaces to allow Seoul Fintech Lab to have more startups.

From just 14 start-ups in its 2018 launch, the incubator, which helps companies find the right lawyers, raise funds and provide office space, now supports nearly 100 companies from 10 countries. money, to the point of multiplying money, insurtech and blockchain.

“When you look at what is happening around the world and the technical and economic links, I think it makes sense to be the capital of Asia,” Short said.

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