UNCERTAINTIES sparked by Sino-British head-butting are unlikely to adversely affect Hongkong's economy in either the short or long term, says a report by Political and Economic Consultancy.
''Hongkong is in the unprecedented situation of being sucked into a political 'black hole' at the same time that the economy is exhibiting momentum that shows no sign of diminishing,'' says the report.
Consultancy managing director Robert Broadfoot added: ''At its current finger-pointing, name-calling level, the dispute should not derail the economy.'' This is because Hongkong's connections with China, the main stimulant for the territory's economic growth, is a fact that cannot be changed by the Sino-British row, says the report.
''As long as the dispute does not de-stabilise the Chinese economy or political system, the key productive sectors of the economy should be largely unaffected,'' Mr Broadfoot said.
The report says that for the first half of the year Hongkong's economy should be particularly strong, as China's boom continues to be the main source of demand for trade, while the US economic recovery should become more pronounced.
It adds that in the second half, some levelling off is possible if China's economy slows due to infrastructure bottlenecks and the central government attempts to tighten up on credit expansion.
By then, however, the US recovery should be well enough under way to help buffer any downturn, the report says.