Economists warn of US act eroding investor confidence
Updated: 2019-12-04 07:38
Hong Kong economists have warned about the possible impacts the so-called Hong Kong Human Rights and Democracy Act may have on investor confidence in the city as an international financial center, as well as its status as an independent tariff territory.
United States President Donald Trump signed the bill into law last week despite strong opposition from China. The new law demands an annual review of Hong Kong's autonomy to justify its trade and economic relations with the US, which are separate from those of the Chinese mainland.
David Wong Yau-kar, chairman of the Mandatory Provident Fund Schemes Authority, said that investor confidence is rather important for an economy as open and international as the Hong Kong Special Administrative Region.
The law might not have an actual impact on Hong Kong's economic activities, Wong said. However, the US will review its special treatment of Hong Kong in trading on an annual basis and discuss the possibility of sanctions, he added.
Amid the trade war between China and the US, this will make investors worry about whether there will be a limit to Hong Kong's import from the US in high-tech products and other potential fields, Wong said.
With the addition of months of social unrest, Wong said Hong Kong has imposed on its investors more political risk than ever.
Once there are doubts, Hong Kong's status in international wealth management could fluctuate, while the city's long-time rival, Singapore, becomes a safer destination, warned Wong, who is also a member of the Exchange Fund Advisory Committee - a statutory body that advises the financial secretary about the city's Exchange Fund.
The law does no good to Hong Kong except for casting the SAR as a "gaming piece" for the US against China, Wong said.
Stephen Wong Yuen-shan, a board member of the Hong Kong Financial Services Development Council, echoed that sentiment, noting that the SAR is a highly export-oriented economy, which is very sensitive to the uncertainties of the international situation.
The city therefore needs a stable environment to maintain its status as a financial center, Stephen Wong said, adding that the US law can threaten Hong Kong's independent tariff treatment and as a result lead to a possible decrease in the city's shipping and cargo transit volume.
Residents protest the Hong Kong Human Rights and Democracy Act, which was signed into law by US President Donald Trump last week, outside the US Consulate General Hong Kong and Macau in Hong Kong on Tuesday. China Daily
(HK Edition 12/04/2019 page4)