Hong Kong security law: any US attempt to destroy city’s financial hub status would be a challenge, analysts say
- Hong Kong’s financial industry closely watching fallout from China’s imposition of security law on city
- US moves to undermine Hong Kong dollar peg or city’s status as financial hub would be difficult, analysts say
Hong Kong is unlikely to see mass relocations of financial firms over China’s plans to impose a security law on the city, though many in the sector are watching keenly for more details, analysts said at a South China Morning Post webinar on Friday.
The Trump administration has said it will revoke Hong Kong’s special trade status over the legislation, possibly paving the way for sanctions.
However, US sanctions on China for imposing the law would be a “lose-lose” proposition that would be difficult to implement in practice, said Louis Kuijs, head of Asia Economics at Oxford Economics.
There is a war chest of Hong Kong for US dollars that is supporting Hong Kong's peg … it would not be even so easy for the US to take measures to try to destroy it
Hao Hong, head of research and chief strategist at Bocom International, said investors were waiting for more information, but any move to destroy Hong Kong’s status as a financial hub would be a “challenge”.
“The Hong Kong peg had existed for nine years before the US government enacted a law that supported free exchange in Hong Kong,” Kuijs said.