As published on reuters.com, Monday January 13, 2020.
HONG KONG (Reuters) - Hong Kong’s chief executive Carrie Lam and top finance officials praised the Chinese-ruled city’s resilience as a global financial hub on Monday amid more than six months of often violent pro-democracy unrest.
Protests escalated in June over a since-withdrawn bill which would have allowed extraditions to mainland China, where courts are controlled by the Communist Party. They have since broadened to several demands, including universal suffrage.
Speaking at the opening of a regional financial forum, Lam said the city’s financial system remained stable thanks to lessons learnt since the 1998 Asian financial crisis. Lam cited the listing of e-commerce giant Alibaba Group Holding Ltd as a boon for other listings by mainland companies.
The city’s “strengths and resilience, just like our financial systems, have not been undermined despite (the fact) that we experienced considerable social unrest and challenges”, Lam said.
She added she was confident the former British colony, which returned to China in 1997, would bridge divisions and realize its goals of a reunited community and “flourishing” economy.
Finance Secretary Paul Chan, speaking at the same event, said Hong Kong’s banking system was running smoothly and had ample liquidity despite the city facing “unprecedented” turbulence.
Hong Kong Monetary Authority’s Deputy Chief Executive Howard Lee said the strong performance of financial assets was further proof of the city’s resilience.
“No matter whether it is the currency or the equity markets or infrastructure, they seem to be going through a kind of parallel universe,” he said.
The Hang Seng index was trading at its highest since July, while the Hong Kong dollar has flirted with three-year highs.
Julia Leung, deputy chief executive of the Securities and Futures Commission, said that Hong Kong markets had been “hyper stress tested in the last six months” and they “had done well”.
Many protests involved violent clashes between protesters and police on central streets lined by the city’s tallest towers hosting top finance companies.
Some financial firms have been caught in the middle, with branches of mainland banks repeatedly vandalized as protesters vented their anger at what they perceive as Beijing meddling in the city’s affairs, an accusation denied by Beijing which blames the West for fomenting unrest.
HSBC has also drawn the ire of some protesters who accuse it of being complicit in action by authorities against activists trying to raise money to support their campaign. HSBC strongly denies any connection.
Hurt by a tariff war between Washington and Beijing, and with protests hurting tourism and retail sales, Hong Kong’s economy has fallen into recession and is relying on its finance industry to prevent a deeper downturn.
Chan said the government was considering a more “competitive” tax arrangement to attract private equity funds to the city and further relief measures to prop up the economy, without offering further details.