The Chineseization of Hong Kong may continue to help the economy, but it will increasingly become a Chinese rather than an international center, says Sari Arho Havrén of Business Finland.
Economic seems to be booming in Hong Kong, which is politically tightened and plagued by severe interest rate restrictions, but at the same time multinational companies are relocating their regional offices.
The business climate in Hong Kong has been more or less stagnant for the past few years, according to the Central Chamber of Commerce’s expert on international affairs and the Secretary General of the Finland-Hong Kong Chamber of Commerce. Jenni Isola.
Hong Kong has been ravaged first by protests and riots, then by the uncertainty caused by the entry into force of the Security Act and the corona pandemic, which, among other things, has made entry and is still very challenging, Isola commented to STT by e-mail.
Hong Kong is still a very important English-speaking economic area in Asia, according to Isola. On the other hand, China’s political pressure is clearly visible in Hong Kong and also causes uncertainty about future investment.
Both Isola and the Consul General of Finland in Hong Kong Johanna Karanko underline, however, that Hong Kong was the third largest destination for foreign investment in the world last year.
According to Karango, the financial markets have gone stronger than ever last year and this year. There has also been a commodity trade in the hard boom.
Financial magazine Financial Times according to nearly fifty foreign regional headquarters have already left Hong Kong this year. At least six global banks, among others, have left the region. At the same time, however, there will be some Chinese branches to replace it.
“The Chineseisation of Hong Kong can certainly help that economy in the future, but it will become more and more Chinese and not an international center,” Sari Arho Havrén seal.
According to Arho Havrén, the future of Hong Kong is linked to how mainland China can benefit from the region. For China, Hong Kong’s greatest importance is its freely convertible currency, which is not the case in the mother country.
For foreigners, Hong Kong, according to Arho Havrén, remains a low tax rate of 15%. It is therefore in Hong Kong’s interest to keep the tax rate low, and there are no indications that taxation will be tightened any time soon.
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