The US’ sanctions on the Hong Kong Special Administration Region (SAR) might have caused mild concerns in the market, but have limited real impact on the local economy, Paul Chan Mo-po, financial secretary of Hong Kong said in an online post on Sunday.
The US announced it would revoke preferential trade status of Hong Kong shortly after the new national security legislation took effect on June 30, in addition to restricting export of high technology products to Hong Kong.
“Although the sanctions have raised some concerns in the market, they have limited impact on the Hong Kong economy,” Chan wrote in the post, “the US’s sanctions are in severe violation of the basic principles of international law and international relations.”
Chan also noted that the Hong Kong financial market has been running smoothly since the new security law took effect.
Hong Kong’s banking system saw no clear sign of capital exodus and more than $11 billion has flown to the Hong Kong monetary system. The capital market has been robust and was especially enthusiastic in response to a series of IPOs on Hong Kong’s stock exchange in early July.
The Hong Kong market rallied on July 2, the first trading day after the new security law took effect, with the benchmark Hang Seng Index (HSI) closing 2.85 percent up.
“The national security law is curbing riots and violence that have been ravaging the city for months last year, ” Dong Dengxin, director of the Finance and Securities Institute at the Wuhan University of Science and Technology, told the Global Times on Sunday.
“For people in the financial industry, the new national security law is promising a more stable and favorable environment for their capital in Hong Kong, and therefore a strong boost of confidence in the local market’s future performance.”
IPOs in Hong Kong stock market have been on the rise during the first half of this year, including some of the biggest listings of large internet and technology companies from the Chinese mainland. Netease, China’s gaming giant, raised around $2.7 billion in June, and JD.com, the internet and e-commerce giant, raised up to $3.87 billion in its second listing in Hong Kong.
Chan stressed in his post on Sunday that the SAR government has confidence in maintaining the long-term prosperity and stability of Hong Kong with support from the central government. Hong Kong will be able to provide a world-class business environment and regulation framework for global investors as before.
Hong Kong residents hold banners opposing the US and foreign meddling in China’s internal affairs in front of the US Consulate General in Hong Kong on July 2.
