Switzerland, long known as the "secret vault" for the world's wealthy, has ceded its top position in the offshore wealth management market to Hong Kong. Analysts say the center of global asset flows is shifting from Europe to Asia, driven by the explosive growth of Asian wealth combined with an influx of Chinese money.
According to the Financial Times on Saturday, global consulting firm Boston Consulting Group (BCG) estimated that Hong Kong's offshore assets reached approximately $2.9 trillion (about 4,370 trillion won) as of last year. This figure surpassed Switzerland for the first time.
Offshore assets refer to assets that individuals or companies entrust to financial institutions outside their home country for management. They are typically moved for purposes such as tax savings, investment diversification, and spreading political and legal risks.
In particular, about 60% of the assets attracted by Hong Kong were analyzed to be funds coming from mainland China. This is interpreted as the effect of wealthy individuals significantly increasing their demand for overseas diversified investment amid China's economic slowdown and the prolonged U.S.-China conflict.
Some interpret that the motive has become more about avoiding uncertainty than simply tax saving. As geopolitical risks and regulatory changes across countries have grown since the COVID-19 pandemic, a clear trend has emerged of wealthy individuals dividing their assets across several financial hubs rather than concentrating them in a particular country.
Michael Felman of Rowland, an official in the Switzerland-based wealth management industry, said in an FT interview, "This is a completely different pattern from the past." He explained, "Recently, clients consider jurisdictional diversification itself, rather than returns, an important strategy."
The revival of China's capital markets is also cited as a factor behind Hong Kong's rapid rise. As the Hong Kong stock market has recently shown signs of recovery, its role as a window for Chinese companies to raise overseas funds has strengthened again. The expanded influence of Chinese companies in advanced manufacturing sectors such as electric vehicles, batteries, and artificial intelligence (AI) is also assessed to have stimulated the inflow of funds.
Meanwhile, Switzerland, long regarded as a "symbol of safe assets," appears to be experiencing slowing growth. Analysts say it has become difficult to maintain its former absolute dominance as global financial regulations have tightened and pressure for tax transparency from the U.S. and Europe has increased.
The competition among Asian financial hubs is also intensifying. Singapore, which had been cited alongside Hong Kong as a major beneficiary, has reportedly seen its growth pace slow somewhat after supervisory authorities tightened scrutiny of foreign assets following a recent large-scale money laundering case.
BCG forecast that given the pace of wealth accumulation in Asia going forward, the gap between Hong Kong and Switzerland is likely to widen further. Some observers predict that by 2029, Hong Kong's offshore assets could exceed Switzerland's by more than approximately $600 billion (about 902 trillion won).
