If it ain't broke, don't fix it

If it ain't broke, don't fix it The merger of NYSE Euronext and Deutsche Boerse, a defining event of the accelerated financial globalization in 2011, creates the world's largest stock exchange. It starts a new round of competition in the exchange industry among the international financial centers. Hong Kong, as one of China's international financial centers, must actively address the challenges on its own instead of simply following suit. It should be noted that behind the recent spate of exchange mergers is the old competition among the leading international financial centers. In essence, every financial center wants to increase its influence in the global market. For quite some time, the New York Stock Exchange has been considering ways to access China's market. As proclaimed by top managers of NYSE Euronext and Deutsche Boerse (or German Stock Exchange), one of the main purposes behind the merger is to make greater inroads into the Asian market - because they see the Asia-Pacific region as the heart of global growth. A new key driver for Hong Kong's market growth in the future will be the offshore yuan business, including yuan financing, bonds, trade settlement, investment and even wealth management. Hong Kong is uniquely positioned as the biggest offshore yuan center. Furthermore, with the "China factor" rapidly growing, Hong Kong should focus more on emerging economies by levering its unparalleled strength to facilitate trade and investment between the China and other emerging economies. In doing so, there are more things for it to do to promote multiple currencies' payment and settlement among the developing economies. To "keep doing what we are doing" is the best way for Hong Kong to keep pace with New York and London. Not only should Hong Kong continue to learn the best practices from the West, but also and more importantly it must be an innovator and a leader rather than just a follower.