Coronavirus: Fallout from global pandemic clouds Hong Kong’s economic recovery, Kurt Tong says
- City’s open economy, already reeling from months of pro-democracy protests, is considered particularly vulnerable to external shocks like a global health crisis
- Executives and analysts, speaking on Monday, say they don’t expect the US to significantly reduce the 25 per cent tariffs on US$250 billion in Chinese goods
Governments worldwide are grappling with the political, economic and public health fallout from the coronavirus, but Hong Kong faces a particularly challenging road ahead, business leaders and former US officials said on Monday.
Coming on the heels of months of demonstrations, the virus has hammered the local and Chinese economies. It has also slowed the integration of the two economies and tended to widen already polarised views among Hong Kong residents toward the mainland, some said.
“The Hong Kong government has actually done a very credible job … in containing coronavirus infections,” said Kurt Tong, former US consul general to Hong Kong and Macau and now a partner at the Asia Group consultancy. “But it’s getting zero credit for that because the trust level towards the government was so low to start with.”
Hong Kong’s open economy makes it particularly vulnerable to external shocks like the current pandemic. It was already reeling from months of pro-democracy demonstrations that were triggered in June by a bill to allow extradition to China. And its ties to global markets leave it vulnerable to the looming global downturn.
“It’s in a passel of trouble,” Tong said at an event organised by the National Press Foundation in Washington. “Financial markets will continue to reflect global trends, not local trends. The local economy will look extraordinarily bad throughout 2020. And there will be more political instability in the coming year, which is all kind of sad.”