The global economy seems too healthy for the comfort of many news hacks who still believe in the old adage that bad news sells newspapers.

While reporters and editors are duty bound to report the "good" news, they have to dig deeper to find the negative side of the story. It's worth checking out because Hong Kong's external-oriented economy is always exposed to the slightest change in influences from abroad.

In fact, you don't need to look too far. Former Federal Reserve chairman Ben Bernanke recently noted the darker side of the economic picture. He warned that the wrong timing of tax cuts, coupled with deep uncertainty and higher costs resulting from the global trade dispute, could torpedo the growth momentum that has been building up fast.

His view was echoed by some economic analysts who reckon that the risk of recession rises rapidly as they look ahead into 2019.

Of primary concern to economists and, of course, to Hong Kong as the region's trading hub, is the possible fallout of a global trade war that could lead to a global escalation of tariffs.

This could well be happening. Several major trading partners of the US, including the Chinese mainland and some European economies, have said they would impose tariffs on selected US imports in retaliation against US tariff threats.

Some economists estimate that following through with the most dramatic tariff threats could shave a percentage point off the world economic growth of 3 percent projected by the World Bank.

The impact of the trade row between the US and the Chinese mainland would be felt in various key sectors of the Hong Kong economy, including finance, logistics and transportation.

The strong dollar, coupled with a booming stock market and rising bond yields, have attracted huge capital outflows from emerging markets to the United States. The problem of capital outflow facing Brazil, Argentina and Turkey may not have a direct impact on Hong Kong.

But, the net outflow of overseas capital from Hong Kong in the past few months, though on a much smaller scale, has already pushed up the benchmark interest rate that represents banks' fund costs. A lending rate increase that could hit the local property and stock markets had been widely predicted with the latest US rate hike.

So much for bad news.

(HK Edition 06/15/2018 page9)