HK's economy 'chained to Brexit, Trump ripples'
Updated: 2017-01-17 07:57
By Oswald Chan in Hong Kong(HK Edition)
Financial chiefs warn effects of Britain quitting EU and uncertain US trade policies could affect the financial markets
Hong Kong will monitor closely how the effects of Britain's shock decision to abandon the European Union and the uncertainties arising from the new trade policies of US President-elect Donald Trump, as well as the outcome of upcoming key elections in the eurozone, will affect the SAR's financial markets this year, panelists told the 10th Asian Financial Forum (AFF) being held in Hong Kong Jan 16 and 17.
The warning came amid media reports emanating from the United Kingdom that Prime Minister Theresa May may take the country out of the EU with a "hard thump", including quitting both the European customs union and the European Court of Justice too.
The reports drove the British pound to 32-year-lows against the greenback on Monday, while Asian stock markets dived as Trump's inauguration on Friday got closer.
Some 2,800 financial and business leaders, policymakers, investors and high-net-worth individuals from around the world are attending the Hong Kong forum, co-organized by the HKSAR and the Hong Kong Trade Development Council (HKTDC), focusing on how Asia can drive economic change, innovation and connectivity.
"The continued strengthening of the US dollar and the normalization of US interest rates has exerted a great impact on capital flows," Acting Financial Secretary Ceajer Chan Ka-keung told the gathering on Monday.
"Trade policies under the US new government, led by President-elect Donald Trump, are still not clear, coupled with the uncertainties associated with the Brexit process and political election results in France, Germany and the Netherlands this year. The market focus will turn to Asia on whether the region can be an investment safe-haven area and an engine for boosting global economic growth," he said.
Over the last 10 years, he pointed out, Asia had contributed more than two-thirds of the world's economic growth.
"With investment demand set to bolster, the financial-services industry is transforming toward service-oriented, innovation-oriented and high value-added oriented," Chan envisaged, adding that the Chinese mainland-led Belt and Road Initiative will create a virtuous cycle in fostering consumption and trade that will benefit all economies.
"The 'One Country, Two Systems' principle facilitates trade flows for Hong Kong and enables the city to play the super-connector role," Chief Executive Leung Chun-ying said at the AFF's opening session.
"As the Belt and Road Initiative rolls out, Hong Kong's super-connector role will be even more cemented," he said.
The Belt and Road Initiative is the central government-led development strategy that focuses on connectivity and cooperation between the Chinese mainland and some 60 Eurasian countries and regions.
"Hong Kong is ranked as the freest economy for many years amid global economic uncertainty. Hong Kong's low inflation rate, skilled pool of labor and strong adaptability of the innovation industry can enable the city to leverage its niches," Leung reckoned. "Hong Kong can also be the bastion of nurturing financial technology."
Besides a series of keynote speeches and thematic workshops, the forum has also arranged deal flow matching sessions co-organized by the HKTDC and Hong Kong Venture Capital and the Private Equity Association in such areas as food and agriculture, financial technology, clean technology and manufacturing technology, as well as infrastructure investment.
Last year, the AFF had arranged more than 570 meetings involving 290 investment projects from 25 countries and regions.
The 10th Asian Financial Forum, focusing on how Asia could drive economic change, innovation and connectivity, kicked off on Monday in Hong Kong. It has invited some 2,800 financial and business leaders, policymakers, investors, and high-net-worth individuals from around the world to participate. Parker Zheng / China Daily
(HK Edition 01/17/2017 page1)