Chief Executive of Hong Kong Exchanges and Clearing Limited (HKEX) Charles Li said on Friday that Hong Kong’s status as an international financial center will not be affected by the national security legislation for Hong Kong or the sanctions threatened by the United States.
Hong Kong’s success is largely hinged upon the unique construct known as “one country, two systems,” which remains unequivocally in line with China’s developmental interests, he said, pointing out that the national security legislation aims at safeguarding Hong Kong’s long-term stability and “one country, two systems.”
Li also noted that the national security legislation is unlikely to bring about any meaningful changes to the fundamentals of Hong Kong’s international financial market or to the way it operates.
Li pointed out that Hong Kong is “unfortunately being used as a political football” by the United States against China and the national security legislation for Hong Kong is just a “convenient pretext.”
However, he noted that preliminary consensus is emerging that the impact of the U.S. revoking Hong Kong’s special trade status would actually be quite manageable.
As stated by the Hong Kong Special Administrative Region government’s Financial Secretary Paul Chan in his blog last week, the annual amount of local manufactured goods exported to the U.S. accounts for less than 2 percent of Hong Kong’s manufacturing output and less than 0.1 percent of total export value, Li said.
“It may be that the U.S. is actually hurt harder than Hong Kong as the U.S.’s trade surplus with Hong Kong in the last decade has been among the biggest of all its trading partners, totaling almost 300 billion U.S. dollars,” he added.
Hong Kong has the most critical elements for any international financial center, including the free flow of capital and information, an established and trusted rule of law, internationally accepted language and cultural norms, proximity to large economies and abundant capital, Li said.
“In this regard, it is hard to see that the U.S. has the real motivation, or the appropriate tools to systematically undermine Hong Kong without also creating serious collateral damage for its own shores and its allies’ interests.”
Looking beyond the current challenges, Hong Kong will continue to play a major role, anchored in the mainland, in connecting with the world and meeting the needs of those in both the East and West, he said. “This is not the end of Hong Kong as some may fear, (but) only another of its many reinventions.”