How a Global Network Integrates Asia into Offshore Economy and Is Responding to Tightening Global Rules on Tax

Thursday, 19 July 2018: 18:00
Oral Presentation
Justin ROBERTSON, City University of Hong Kong, Hong Kong
In a global financial system, financial processes assume a relatively common form across jurisdictions and are used by a diverse set of actors, not simply Western actors. During the last decade, these conditions have been met in the case of offshore finance and a very specific network has come together to manage offshore capital flows. This network now primarily operates to connect Asian demand for offshore services with financial products in investor-friendly jurisdictions. Following earlier Western practice, Asian firms and individuals are seeking to maximize the benefits of offshore companies and trusts. This global network now confronts a changing regulatory landscape. The most serious international steps ever taken to rein in offshore finance are being translated into national policy.

This paper has two aims. First, I will document the network underpinning the offshore economy by asking how Asian actors have been able to reach the offshore economy and who holds power in this global network. I will demonstrate that the most powerful offshore practitioners are based onshore, rather than in well-known offshore locales, such as the British Virgin and Cayman Islands. Particular attention will be paid to offshore practitioners based in Hong Kong and Singapore that direct a network that includes participants in Mainland China and throughout offshore financial centres. Second, I will assess the extent to which this global network is threatened through an analysis of how emerging regulatory frameworks are being implemented within Asia. Research will be presented on whether changes are discernible within the offshore network, specifically the financial services demanded by and offered to Asian clients. Data will be drawn from elite interviews in Hong Kong, Shenzhen and Singapore, as well as attendance at industry gatherings, especially the China Offshore Summits. The findings will be relevant to the study of corporate power amid tightening global rules.