Hong Kong should brace itself for impact of Trump measures, says financial secretary Paul Chan
Finance leaders sound the alarm with policies promised if global economy turns turbulent
The city’s top two finance officials have issued warnings about possible trouble in the global economy, with countermeasures planned if Hong Kong is hit by the impact of US President Donald Trump’s protectionist policies.
Financial Secretary Paul Chan Mo-po and Secretary for Financial Services and the Treasury Professor Chan Ka-keung both sounded the alarm on Sunday as the world watches every move made by Trump since the tycoon and former reality TV star was sworn in as America’s 45th president last month.
In a blog post, Paul Chan wrote that he was considering rolling out “balanced and suitable” policies – to be announced in his maiden budget later this month – to ensure the city remained stable even if the world economy became turbulent.
“New US president Donald Trump and his team have been making controversial speeches and decisions almost every day after he was sworn in,” Chan wrote.
“They have at times criticised some major economies for depreciating their currencies to strengthen their own trade edges, raising worries that Trump’s new policies will be inclined towards protectionism.”
Chan wrote that Hong Kong, as a small economy, could not “lower its guard”, and “must constantly watch out for changes” in the outside world.
Elections in Germany and France later this year could also bring shocks to international financial markets, Chan added.
But pointing to the 7.6 per cent expansion of the service industry on the mainland, Chan said that China’s steady economic growth had helped boost the global economy.
“Recently, many people have suggested to me that the government should make use of its relatively sufficient financial reserves to introduce short-term measures to alleviate everyday financial pressures faced by people. Many have also advised me to spend resources on supporting new industries in the long-term,” he wrote.
He stressed that he will take into account all of the suggestions given to him.
Chan Ka-keung meanwhile wrote on his blog that if and when Trump introduced controversial policies, he would need to coordinate with Congress and other American stakeholders.
In the process, he said, Trump would inevitably test to what extent Congress and the country’s judiciary can check a president’s power. Trump could also test the “bottom line of the international community”, he warned.
Chan Ka-keung added that over the years, US presidents have always sought common ground with people who follow different political beliefs. But he expressed doubts over whether Trump would do the same.
“Hong Kong is an open economy. Any untoward changes in international trade and financial systems will unavoidably affect us,” he said.
“Even though Trump’s executive orders have not yet directly impacted us yet, his trade protectionism policies will have an effect on the international supply chain. His military and diplomatic policies will also bring geopolitical risks. Hong Kong will not be spared.”