US sanctions: Hong Kong’s best defence is to reinvent itself as China’s top financial hub
- Hong Kong reassembles a fine porcelain store in which two powerful bulls have locked horns
- It is vital to minimise the damage both by emphasising why Hong Kong should still be attractive to international firms and by leveraging the China factor
Most economists and businessmen regard the material impact on Hong Kong as insignificant because Hong Kong does not manufacture goods bound for the American market except some jewellery and food products.
The US decision to insist that Hong Kong’s goods bound for the American market are labelled “Made in China” raises the question of whether other markets will follow suit. Would the international community take this as the beginning of the process of bringing this city into the fold of the league of key Chinese cities so that Hong Kong loses its uniqueness?
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Would Hong Kong’s distinct character, particularly its global outlook, slowly dissipate?
One cannot help wondering if the international community would one day perceive Hong Kong as just another major Chinese city, if it would lose its appeal as an international metropolis. After all, Trump did say that Hong Kong will now be treated the same as mainland China.
However remote or unrealistic they sound, these risks cannot be dismissed and are the consequence of the conflict between the two largest economies in the world – the US and China. We cannot be naive and underestimate the adverse impact of the US actions.
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Hong Kong resembles a fine porcelain store in which two powerful bulls have locked horns; the city is bound to sustain damage. Thus, it is vital for Hong Kong to adapt to minimise the impact.
Because of this unique position, Hong Kong serves as a natural gateway for international companies looking to tap the huge Chinese market as well as for mainland enterprises wanting to venture into the international market. These fundamentals have not changed.
The best defence strategy for Hong Kong against growing US sanctions would be to use the opportunity to reinvent and reposition itself by leveraging the China factor.
The abundant supply of financial professionals, local as well as international, guarantee that Hong Kong’s investment sector will continue to deliver with flying colours. In other words, we can reinvent ourselves as the foremost financial hub for China, an aspiration that echoes Beijing’s policy.
Seen in this way, it is not entirely bad for Hong Kong to be facing increasing US sanctions if we can reinvent and reposition ourselves successfully.
Ken Chu is group chairman and CEO of Mission Hills Group and a national committee member of the Chinese People’s Political Consultative Conference