Hong Kong risks its future as global business hub

by Katrina Hamilton via Reuters

HONG KONG (Reuters Breakingviews) – Carrie Lam’s government could squander Hong Kong’s privileged position in the eyes of foreign governments. A bill that would allow extradition to the mainland prompted hundreds of thousands to protest on Sunday. If the chief executive ignores the message, Washington, Brussels, and others may reconsider their relationship with the territory. That would hurt both Hong Kong and China.

The government says the debate on the bill will continue in the city’s parliament this week. It faces fierce opposition. The march was the largest since 2003 when protesters forced the administration to shelve controversial security legislation. The controversy brings together unlikely allies, from ordinary citizens to international chambers of commerce, judges, and tycoons, united by their distrust of the mainland legal system.

The nightmare would be if the United States decides Hong Kong’s autonomy has been compromised. A May report from the U.S.-China Economic and Security Review Commission noted the new law could trigger a reappraisal of the United States-Hong Kong Policy Act of 1992, which defines the territory as a separate entity to China. Without it, Hong Kong would be subject to tariffs, visa restrictions, and more. That may feel farfetched, but the threat is not unimaginable amidst a bitter trade war.

Local companies would face a cooler reception in markets where mainland entities are subject to scrutiny. Titans like CK Hutchison – part of the conglomerate founded by Li Ka-Shing – are already accustomed to a certain wariness when they venture into sensitive sectors. Rival financial centers like Singapore will try to capitalize too as bosses and bankers rethink homes, headquarters, and travel.

 

Capital Flight From Hong Kong (w/ Kyle Bass)

from Real Vision Finance

Kyle Bass, CIO of Hayman Capital, discusses the dire geopolitical situation in which Hong Kong finds itself. Bass talks with Raoul Pal about how the threat of Chinese political interference could lead to a financial crisis caused by capital flight. This video is excerpted from a piece published on Real Vision on May 3, 2019, entitled “The Asymmetric Opportunity Revealed.”

This past weekend estimates of 240,000 to upwards of 1 million Hong Kong residents were in the streets protesting a new China extradition law which may be put into effect soon in Hong Kong, quelling potential political oppositions and future freedoms of Hong Kong residents.

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