Being Asia's premier international financial hub has brought great benefits to the people of Hong Kong. The city has an enviable transport infrastructure, one of the best school systems in the world, and a total per capita income of USD 54,370, slightly higher than Germany.
On a recent trip, world economic forum At Davos, many business and political leaders asked me how Hong Kong was doing due to the coronavirus pandemic. I replied that these are definitely difficult times. The worst of the coronavirus pandemic has passed, and activities are returning to normal. twowarwe inflation and higher interest rate It's a burden.
Naturally, global changes have an impact on Hong Kong's economy. In fact, the country's markets tend to be hit harder than other markets by fluctuations in the global business cycle. However, this is a feature, not a bug, of the Hong Kong design. It is a natural expression of the city's extraordinary openness. The connection Mainland China is a US$18 trillion powerhouse.
It is important to understand the good and bad sides of the deliberate policy decisions underlying Hong Kong's economic structure.of hong kong dollar Because of China, it is pegged to the US dollar.one country, two systems” model preserves a special space for the city's political, legal and financial arrangements.
This system has proven critical to Hong Kong's value proposition, both for foreign investors and mainland Chinese companies seeking financing for international expansion.
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Why Hong Kong fixes its currency to the US dollar
Why Hong Kong fixes its currency to the US dollar
But if American inflation spikes, regardless of local conditions, the monetary authorities will have to join the Fed in raising local interest rates. This rate hike cycle is Cooling down of the mainland economyplus US inflationary pressures and geopolitical uncertainty that threaten trade and investment flows.
Increasing borrowing costs during times of economic uncertainty will naturally impact the risk appetite of businesses. property valueit may trickle down to consumption as well.
In the long term, it would be healthy for Hong Kong's notoriously expensive real estate prices to readjust. As Hong Kong's largest financial institution, we are confident that the market is fundamentally stable and will recover. However, the current situation is certainly painful for some.
If openness exposes Hong Kong to distant market forces, it also underpins the city's famous resilience. The city has bounced back from invasions, world wars, the 1997 Asian financial crisis, and the 2008 Asian crisis. global financial crisis; it survived multiple times epidemic disease and protected dollar peg From multiple attacks.
Hong Kong has survived and prospered, in no small part because it maintains the highest labor productivity in Asia.
I know that the current situation is manageable because Hong Kong is clearly in control. unemployment That's below pre-pandemic levels.Main GDP grew 4.1 percent The third quarter was year over year.This his US$360 billion economy has probably grown 3% or more In 2023, it will be a solid growth rate for high-income economies, five times faster than the European Union itself expects.
Yes, serious challenges remain.the population has recovered to 7.5 million We expect to return to pre-pandemic levels by mid-2023, but fundamentals remain challenging.
This is one of the best in Asia Rapidly aging society. From mid-2020 to mid-2023, the city's working-age population (15-64 years old) decreased by nearly 170,000 people.
Hong Kong senior citizens rest in a park in Cheung Sha Bay on August 16, 2023. Photo: Jelly Tse
Hong Kong's openness to immigration has traditionally counteracted this trend, but it is an ongoing one.to Attract and retain young new immigrantsofficials must constantly defend the city and give confidence in its future as not just a market, but a place for young couples to live, work and raise children.
It's not difficult to make that case. For businesses, Hong Kong remains an invaluable link between the mainland economy and the rest of the world. It is China's only fully fungible hard currency market, and the Chinese government actively supports its unique position.
It's time to introduce the real Hong Kong to bring back tourists
family move here Because it's a beautiful and safe place to live and work, with a mild climate and playgrounds, campgrounds, hiking trails, and beaches just a short metro ride from the Stock Exchange.Of the world Top class education system This score is from the Program for International Student Assessment (Pisa) and is also one of the most unbiased.
The people of Hong Kong have repeatedly shown that they can overcome challenges by integrating with the rest of the world and adapting, upgrading and repositioning their businesses as demands change.
David Liao is HSBC's co-chief executive of Asia Pacific.