Few people sit closer to the line between global capital and Chinese credit than Terry Zhang of CSPI Ratings, As part of our Industry Insight series, Sheffield Haworth sat down with Terry to discuss Hong Kong’s role as a financial conduit, the real story behind renminbi internationalisation, what global investors still misread about Chinese credit, and the narrow pool of leaders who can operate credibly across both worlds.
ABOUT OUR GUEST
Terry Zhang (Zhang Wentao) is Head of Global Strategy and Business Management at CSCI Pengyuan International, the international arm of CSCI Pengyuan (CSCI Pengyuan Credit Rating Co., Ltd).
CSPI Ratings is a credit rating agency headquartered in Hong Kong and licensed by the Hong Kong Securities and Futures Commission since 2012. Its position is deliberately a bridging one. It pairs global rating benchmarks with an on-the-ground emerging market perspective, connecting international investors with Chinese credit. As a member of China Securities Credit Investment Group, it draws on a network of leading Chinese financial institutions, and in 2025 it was recognised by the Mandatory Provident Fund Schemes Authority as an Approved Credit Rating Agency.
That seat, between global capital and domestic Chinese credit, is what makes Terry’s read valuable. He has lived and worked in Hong Kong for 16 years.
The conversation was led for Sheffield Haworth by David Wong, Executive Director and our Greater China Banking Specialist. Based in Hong Kong, David partners with leading financial institutions to place talent at managing director and director level across Greater China. He is native in Mandarin and Shanghainese, and fluent in Cantonese and English.
Some answers have been lightly edited for length and clarity. Individual names and specific firms have been withheld.
HONG KONG AS THE BRIDGE
David: Hong Kong has long acted as the conduit between the mainland and the rest of the wodrld. With friction between China and the United States rising, does that role still hold?
Terry: Definitely. Hong Kong will continue to play the role of the conduit, or the super connector. That is the term used, and not only between China and the United States, but with the wider Western market.
Much of this is relative. We are facing a period of greater friction between China and the United States, and against that backdrop Hong Kong’s role becomes even more important. This is a place where people can shake hands and hold a sensible discussion.
There have been challenges. In 2019, we had social turmoil here. Over the past six years things have gradually stabilised, and a track record has gradually been built under the national security law, which helps the market with better predictability and visibility than six years ago. As a result, some capital that once moved from Hong Kong to Singapore has relocated back. That owes to two things: proximity to the mainland markets, one of the largest in the world, and a capital market that is much deeper than Singapore’s.
Geopolitics matters, but in finance economics matters more. Thanks to the current frictions, Hong Kong’s role as a middleman still holds, and the Chinese government continues to treat Hong Kong under the principle of one country, two systems. Whatever some Western media suggest, we still live under a different lifestyle, a different media environment, and a different legal environment from our colleagues on the mainland. There is very stringent border control between Hong Kong and the mainland. It is not necessarily a positive, but it shows this is a market that remains distinct from the mainland.
So is the media attention slightly overblown? The reality has not changed as drastically as reported?
Terry: That is right. I can relate to why people publish that Hong Kong is no longer Hong Kong, and there is some rationality to it. But there is equal rationality if you put yourself in the shoes of the Chinese government. It is not in their interest to turn Hong Kong into just another mainland city, as there are already hundreds. Six years on, Hong Kong is still Hong Kong, and in some respects it is getting stronger. Its position has shifted slightly since before 2019, owing to political and geopolitical developments, but it is now playing an even stronger role in renminbi internationalisation.
Do you think that positive sentiment will continue?
Intuitively, yes, though it is not guaranteed. It is always a function of how geopolitics plays out between China and the United States. In the hypothetical and seemingly unlikely extreme case, if Hong Kong were fully sanctioned, that would be a different matter. Until then, Hong Kong continues to play a middle-ground role.
I will give one example. In Hong Kong, we still have access to Western artificial intelligence tools, alongside full access to mainland systems. We have perhaps 60 per cent of the artificial intelligence access available in the West, plus full access to mainland tools. That is a fair mirror image of where the world sits. You get the benefit of China’s technology and growth story, and much of the best of the West as well.
Are banking and financial institutions in Hong Kong adopting artificial intelligence as aggressively as in the Western financial capitals?
I am not on the enforcement side, but almost every party we deal with in Hong Kong has adopted artificial intelligence in one way or another, to differing degrees. We are still early on that curve, and people are working out the best strategy for corporates and individuals. At first many were wary of the idea, regulators in particular. Over time, financial institutions, rating agencies and regulators have had to accept that it is inevitable. You have to live with it. If not now, then within three years, or you will fall behind.
David: China is pushing to make the renminbi a bigger global currency, with more panda bonds and overseas issuance. How real is that shift, and what has to happen for foreign investors to treat these markets as core rather than a niche?
It is real, but it is in the early stages of the long journey of internationalising a currency. We are talking about something on a scale measured in history.+
There is a great deal of misunderstanding here. The financial press often frames it in political terms, but my own observation is that it is not as aggressive or assertive as the media portray. To me it is more a defensive strategy. The share of China in global trade is around 15 per cent, and actual usage is lower still, perhaps three to four per cent. It is nowhere near replacing the United States dollar, and I do not believe that is the policy goal neither. If it were, it would be a poor goal, and it would not happen overnight. You are talking about a transition that could take a century.
What China is really trying to do is secure its own global trade and supply chains, so that money can move in and out of the country without disruption caused by external forces. China has become more export dependent than it was 10 years ago, so it needs to transact in its own currency in an undisrupted manner, whatever happens in the world, including sanction risk and the weaponisation of financial infrastructure. The Russia and Ukraine situation has added urgency. The strategy will be in place for a very long time, and it is still in its infancy. The key message is that it is not a political initiative. It is defensive, about securing the pipeline, but it is real, and that progress has been accelerated by events in the world.
Defensive in the sense that they want to ensure money moves in and out of the country securely and runs undisrupted, in order to support trade and other economic activities.
WHAT GLOBAL INVESTORS SHOULD BE DOING
David: You sit between global investors and Chinese credit. What is the one thing you would recommend investors should be doing?
The best advice is to stay tuned. Every institution is different and entitled to its own strategy on China. But the Chinese credit market has become too big to ignore. Even with very low domestic interest rates, Chinese assets still hold value in a portfolio. At an event recently, a senior regulator noted that Chinese assets have almost no correlation with United States Treasuries or United Kingdom equivalents, which gives them a place in an overall portfolio despite the relatively low yield.
Foreign investors are becoming more sophisticated in China. They have been in the market longer and have hired more local people to adapt. But it is worth bearing in mind the cultural differences in how the country, the society and the corporate world operate here. There is a strong cultural flavour, to some extent shared across the East Asian, Confucian cultures.
First, you have to acknowledge the more tangible role of government in the economy. Government in China has a tangible role in the market here. It is a similar situation in Japan or Korea, where the influence runs through large conglomerates rather than direct intervention. The market is not run in a purely liberal way. But it is a special kind of credit. If you look at default rates in the Chinese credit market, which is still super low, you can see the presence of government and public support.
A typical example in China is the local government financing vehicle, a semi-shadow banking system that is heavily criticised, in China as well as globally. Yet to date these vehicles have had zero default on public bonds, even where the financial statements look weak and the cash flow is not there, because they serve a specific public function in the social system..
The Japanese example is a debt to gross domestic product ratio of around 250 to 260 per cent, which is unthinkable in a Western context. It would not happen in the United States, the United Kingdom or Italy. Much of that leverage built up after the bubble burst in Tokyo in the 1990s, and the government used its agents to stabilise the situation. Crucially, the large majority of that debt is held by domestic investors, with very little external debt. You would not expect to see that in Australia or the United Kingdom.
That model brings stability, though it can also create distortion. Run to an extreme, it can lead to greater hazards.
THE TALENT QUESTION
David: As domestic firms grow internationally, the talent question changes. In your view, who is harder to find: people who understand the regional market but can think globally, or global professionals who can operate credibly in the region, with all its nuance?
Terry: There will be very high demand for people with expertise across all three levels: local, regional and global, rather than two out of three. In finance this is closely tied to the progress of Chinese capital, how far it travels, and whether the internationalisation strategy is pursued offensively or defensively. You need people with both local and global perspective and financial expertise to keep the system running smoothly.
David Wong We are currently executing on very senior mandates, including Head of Coverage roles. After a three-year lull, the healthcare sector has rebounded strongly. We are looking at Chief Executive and Senior Managing Director-level positions, not only in Hong Kong and Singapore but, increasingly, in mainland China.
Professionals with genuine domestic expertise bring immense value. Hong Kong’s economy is gaining momentum, property prices are recovering, and we are seeing a significant volume of IPOs returning to the city. While we cover international firms—specifically US and European names—what is particularly striking over the last five to ten years is the migration of banking Managing Directors to mainland securities houses headquartered in cities like Guangzhou, Shenzhen, and Shanghai. These institutions have rapidly upskilled younger talent on their execution teams. One firm that previously operated with just five execution staff now has roughly 30, and their collective knowledge base is exceptionally strong.
We are seeing substantial cross-border activity at the highest levels. Mainland China and Hong Kong offshore operations are projected to be profitable next year, and I anticipate revenue across China-backed firms in Hong Kong to rise by 20 to 30 percent. The domestic market is so vast that we are only just scratching the surface of its potential. This momentum is very real
Why is the move into the securities houses happening?
David Wong Because the initial public offering market is booming, and the sponsor pipeline with it. Each house has only a limited number of sponsor candidates, and demand far outstrips supply as corporate listings move into Hong Kong.
Terry Zhang There are changes on both the demand and the supply side. Because of the recent paradigm shift, companies are preparing more strategically. They are seeking people who can not only speak English but who have lived and worked across multiple jurisdictions and dealt with different cultures, not only in the developed world but across the Belt and Road regions, Kazakhstan and the Global South. I have not seen this before. There is urgency externally, because of geopolitics and geoeconomics, and a push factor domestically, because the domestic market is running on relatively low margins. Companies in manufacturing and financial services that can project their services globally tend to earn better margins than purely domestic players. There are not many talented people who know China and also understand the developing world, Brazil or South Africa.
How small is that talent pool, the people with an international view, domestic understanding, and the languages to navigate all of it?
David Wong: In Hong Kong’s senior investment banking sector — at the Director level and above — there are perhaps a few thousand active professionals. A significant proportion of them sit on China teams, and many will describe themselves as China specialists, often on the basis of their heritage or language alone. But the reality is more nuanced than that.
Genuine China banking capability at the senior level requires three things simultaneously: an international perspective shaped by working within a global institution, a deep domestic understanding of how Chinese business owners actually think and make decisions, and the language and cultural fluency to navigate both worlds without losing credibility in either. That combination is far rarer than the market suggests.
Many China-focused bankers have strong technical skills but limited access to the people who truly matter — the founders, the controlling shareholders, the family offices behind major corporates. Their relationships may reach the CFO or the Head of Investor Relations, but not the principal. And in China, the principal is everything.
When you apply that filter honestly, the talent pool shrinks considerably. Out of the thousands of bankers across Hong Kong and China, and out of the subset who sit on dedicated China teams, the number who genuinely possess that depth of access, trust, and cross-border fluency is, in my estimation, a relatively small fraction — perhaps one in ten at most.
That scarcity is precisely what makes the right hire in this space so consequential — and so difficult to find.
NEW PRODUCTIVE FORCES AND THE LEADERSHIP TO DELIVER THEM
David: Where is investment flowing now, and what does that mean for the talent firms need? We are seeing capital move into electric vehicles, technology and healthcare.
Terry Zhang Definitely, and things are becoming quite bifurcated in China. We talk a lot about shifting gear in the economic structure. For the past 20 years, China has run a model that relied heavily on land finance: the government develops land and sells it to real estate companies, which build and sell housing, and the government collects taxes. That was the backbone, whatever else was happening. It is no longer there, partly because the model is no longer sustainable and partly because the government itself wants to move away from it.
In its place they are promoting what they call ‘new productive forces’. the term may sound slightly tricky to the Western audience, but it refers to high-technology sectors: semiconductors, electric vehicles, the supply chains built around them, and new energy and the energy transition. We are seeing a great deal of capital pouring into these new sectors and away from the old business models. This has been under way since 2022, so four years now, and it is changing the dynamics on the ground. I expect the trend to continue for a very long time, driven by both a push factor and a pull factor. As the structure of the economy changes, so do companies, and so does their global vision, and demand for talent.
Is the leadership there to deliver that internationalisation, and can firms source the talent regionally, or do they need to bring people in?
Terry Zhang China used to just make t-shirts and sandals. Now it is climbing the value chain. Something often overlooked is China’s scale. By gross domestic product, China is the second largest economy, but measured by purchasing power parity, it is much larger, with 1.4 billion people. Dealing with a market of 1.4 billion is very different from one of 90 million. Translate that scale into industry, and China is the largest player in Asia and getting bigger still. With hardworking and capable people, its industrial power is rising heavily, and industrial capacity that once sat in Indonesia or Vietnam may be drawn towards China. I would not say China is deliberately pursuing this, but it is quite possible that China ends up producing for much of the world as in history. That has complications, but it creates significant demand for talent, not only in technology but also in how you deal with the rest of the world and build a new system. We are looking at something that has not happened before.
Any final thoughts on the horizon, the themes you see shaping the next few years?
Terry Zhang We are at the very beginning of a massive paradigm shift. Much is uncertain. I do not believe any party, the United States, the United Kingdom, Russia or China, has it all worked out. We are probably entering a highly volatile period, and a lot will change. For China the trend is visible, even though it is still early. The government’s determination on new productive forces, its ambition to build an industrial centre for the world, and its currency strategy, offensive or defensive, all create demand.
On banking specifically, I am not the best person on Chinese banks, but I do observe that the top-tier state-owned banks are establishing more branches globally, and their networks are sometimes surprising. They are not trying to replace SWIFT, but they are building their own financial infrastructure. That is no secret. It is part of the same trend. It is a long road, because China has historically been a self-focused and majoritily inward-looking system over the past 2,000 years. To build genuine global sophistication across different parts of the world is a great deal of work, and a great deal of demand.
Our thanks to Terry Zhang for a generous and candid conversation. The themes he sets out, deeper domestic markets, a defensive currency strategy, and a structural shift towards new productive forces, all point the same way: rising, sustained demand for leaders who can operate credibly across local, regional and global markets at once. That is the talent we are built to find.
ABOUT SHEFFIELD HAWORTH
Sheffield Haworth is a leading global consultancy specialising in executive search, change consulting, and strategic advisory. Founded in 1993, the firm has grown to more than 200 professionals across 15 locations in Europe, the Middle East, the Americas, and the Asia-Pacific region. We partner with clients across multiple industries, with a strong track record of delivering people-led transformation across the financial services, professional services, real estate, industrials and technology sectors.
To discuss talent and leadership across Greater China, contact David Wong, Executive Director, Greater China Banking, Hong Kong.
