HONG KONG: Shanghai is not a threat to Hong Kong as the financial market keeps growing, the Lord Mayor of the City of London Ian Luder said.

The Lord Mayor acts as ambassador for United Kingdom-based businesses. He advises the British government on the means to help the financial services sector to function smoothly.

"Shanghai is not a threat to Hong Kong. Hong Kong has the ability and the opportunity to profit from the growth of Shanghai and the growth of the mainland," Luder said on the last leg of his China tour.

He said both Shanghai and Hong Kong can stand as financial hubs because of the size of the Chinese market.

Luder said with a large population, China can sustain more than one financial center.

He said growing market size is beneficial to existing players and Hong Kong ought to be as active as Shanghai in fostering the growth of business.

Luder also said the world needs more than one financial center and he hoped to see the expansion of the market.

At the G20 summit in April, French President Nicolas Sarkozy insisted Hong Kong be placed on a black list of "uncooperative" havens for tax evaders. Sarkozy was unable to win support for his bid. Luder said the Hong Kong government is making an effort to prevent tax evasion. "The administration here has made it very clear that Hong Kong is going to enter a series of tax treaties which will provide exchanging of information," he said.

He said Chief Executive Donald Tsang Yam-kuen told him that legislation would probably approve the treaties soon.

Luder also said China Investment Corporation is considering setting up an office in London but he has no idea about the timeframe.

China Investment is a state-owned investment institution set up in September 2007 with headquarters in Beijing.

Luder added that he would not be surprised if HSBC becomes one of the first Hong Kong companies listed on the Shanghai stock market.

Luder led a United Kingdom business delegation to meet key figures in financial services as well as regulators and political leaders in Beijing, Shanghai, Chongqing and Hong Kong. The 12-day tour began May 29 and ends today.

(HK Edition 06/09/2009 page1)