Opinion | Hong Kong’s role in the trade war should be to explain to the world how far China has come

Christine Loh says Hong Kong firms with mainland operations will be seriously hit by further US tariffs and the city has nothing to gain from demonising China

Instead, Hong Kong should use its unique position to explain the history of China’s development and the progress it has made in opening up

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A man takes a photo of the Hong Kong and Chinese flags as a Star Ferry sails past after a flag-raising ceremony as part of China’s National Day celebrations in Hong Kong on October 1. Photo: AFP

Published: 9:45pm, 13 Nov 2018Updated: 9:54pm, 13 Nov 2018

How US-China relations evolve will set the tone of international discourse for years to come. The glimmer of hope of a speedy resolution to current trade tensions is probably unrealistic. Nevertheless, a lot is riding on the possibility of a respite soon, with the US midterm elections now over.

US President Donald Trump spoke to Chinese President Xi Jinping on November 1 and then tweeted that progress had been made. Then, at a public forum in Singapore, Chinese Vice-President Wang Qishan said China was ready for discussion. Officials from both sides will negotiate ahead of a meeting between Trump and Xi in Buenos Aires later this month on the sidelines of the G20 summit.

If that meeting leads to an easing of trade tensions, it will help Hong Kong for sure, at least in the short term. The Hong Kong Trade Development Council warned that a full-blown trade war would harm Hong Kong’s small and medium-sized enterprises with operations on the mainland should the 25 per cent tariff be imposed on US$200 billion worth of goods made in China from January 1, 2019. That would affect some 5,700 items, ranging from textiles and garments to footwear, car parts, vehicles, batteries, furniture and food.

The message should be clear. Hong Kong companies will need to diversity their export markets and/or take advantage of the growing mainland domestic market in the longer term to survive. They cannot ignore geopolitical shifts any more.

Watch: How the US-China trade war affects Hong Kong