Bank of Butterfield chairman Sir David Gibbons, was heard last week on the morning edition of National Public Radio (NPR) across the US discussing Bermuda's aspirations to take Hong Kong's place offshore as a world financial centre.

In a near ten minute interview, host Bob Edwards said that Bermuda, as the largest remaining Crown colony under the British flag, hopes to capitalise on the economic freedoms of British law.

The discussion revolved around how Bermuda had already long been a base for a large portion of Hong Kong's insurance, pension fund and shipping businesses because of earlier apprehension over Hong Kong's future under Chinese rule.

Sir David said Bermuda profited at Hong Kong's expense, but not overnight.

He said: "That process commenced around about 20-odd years ago, before the 1984 agreement was actually signed with Great Britain, when there was some apprehension as to what might develop over the coming years. And subsequent to that agreement, of course, the pace accelerated.

"As things stand now, just under half of all of the companies listed on the Hong Kong Stock Exchange have a corporate presence in Bermuda. So most of that business has been done and continues now.'' The bank chairman said prudence dictated that pension funds and other assets were physically located in Bermuda, while the ownership remained in Hong Kong.

He said there were uncertainties about the future of Hong Kong-based assets.

"No-one knows what is, in fact, going to happen in terms of assets in Hong Kong,'' he said. "There are assurances -- you heard Mr. Tung, the new chief executive officer saying that the agreement would be religiously adhered to.

"But it must be tempting. Hong Kong has US$70-80 billion in their exchange reserve fund there. There are large sums, tens of billions of dollars in pension funds belonging to the government of Hong Kong.

"And the People's Republic is sadly in need of enormous sums of capital. I've met with officials of the Bank of China. For example, they estimate that some $200 billion alone is needed for electrical generation. I'm told other tens or hundreds of billions will be needed for telecommunications, construction of highways and other things in the infrastructure.

"So, prudence would dictate, having said all of that, that it must be sensible, when assets can be transferred, to have them in another jurisdiction, because at a point in time, if they are that short of money, the PRC may feel that the money belongs to them anyway and they should borrow from it.'' Sir David said that while there may be a further transfer of assets, most moveable assets have long since been taken out of Hong Kong. But he said the more nervous people become, the more certain it is that financing will be done through Hong Kong companies to Bermuda and internationally, in order to retain access to the British judicial system.

Sir David Gibbons