EmerioBanque

Hong Kong: China-US tensions put Asia's financial hub at risk

Hong Kong, discerned as one of the leading financial cores across the globe, is on the verge of doom because of the geopolitical conflict between the USA and China. According to experts, if the special trade privileges of Hong Kong stood rescinded, it would certainly wear away the city as a global financial and export hub.

The new security law imposed in HK is going to end it's freedom. The State Department of the US declared that HK is no longer independent from China and does not perform like an autonomous entity.

This declaration has clearly stated that China and the US are on for a full-fledged economy war. The Government of the United States could backfire by inflicting high tariffs, visa cutoffs, and additional financial embargoes.

As a result of the Security Bill, it is expected that Washington might abolish economic and trading benefits and include the unique customs territory. In the initial quarter of 2020, Hong Kong's economy faced a contraction of 8.9% after the technical depression of 2019.

Rajiv Biswas in an interview with DW stated that the HKSAR economy is predicted to shrink by 6.6% this year. The tourism and retail sector has to deal with a lot of losses due to the Coronavirus outbreak. Abandoning Hong Kong's SAR economic status by the US Government could make the Hong Kong economy depreciate beyond imagination.

Hong Kong's Government reacted to this and asserted that abandonment of the country’s Special status will not only create a negative impact on it but also on the US economy.

HK occurred to be the biggest trading partner for Washington from 2009 to 2018 with a trade value of $297 billion. They also proclaimed that 1300 US firms were working and based in the city.

Related news: COVID-19 Crisis Poses Threat to Financial Stability

It has always been the gateway for China to connect with International financial markets despite the fact that Shanghai and Shenzhen work as China's financial hubs. China utilizes Hong Kong to extract foreign funds.

China intervenes in the financial system and keeps thorough capital control, whereas Hong Kong is one of the open economies globally and works like a big debt and capital financing market. For this reason, international companies choose Hong Kong as a headquarters to develop their businesses.

"As a result of desertification from the US Government, the city would miss the access to advanced US technology and face huge casualties. It would also increase US tariffs" put down in a research note by Mark Williams.

HK cardholders might suffer from this geopolitical war too. Earlier, they were allowed to transit to the United States without an advanced visa application, but in the current scenario, they might lose this benefit.

To impose supremacy on Hong Kong, both countries are eroding the economic market, affecting a lot of firms as well as staking Asia's financial center.





Other news

Exchange Rates

Currency Buy Sell
EUR USD 1.06 1.10
EUR GBP 0.86 0.89
EUR CHF 1.02 1.06
EUR AUD 1.72 1.70
EUR JPY 116.08 116.56
EUR MYR 4.50 4.77
EUR SGD 1.53 1.57
EUR HKD 8.27 8.53
EUR CAD 1.54 53.84
EUR DKK 9.75 1.55

Most Recent Blogs View All Blogs

12 May

Top Ways Fintech Industry Is Getting Transformed Through Blockchain

If you are a businessman who is indulged in any kind of trade ie. import-export activity, you might ...

10 May

Fintechs Are Proving To Be A Boon For Small Exporters

Since the global pandemic of Covid-19 hit the world economy, the global traders have gone into deep ...

25 Apr

Letter of Credit Issuance Process - An Important Trade Finance Instrument

Looking for a letter of credit? This guide covers what an LC is, how it works & its process. Rea...

Disclaimer

Emerio Banque is an innovative global financial institution incorporated in England and Wales with Legal Entity Identifier 875500DGPPWAFABBK130. Emerio Banque does not offer its products and services to businesses and/or persons registered in the United Kingdom.

No information on this website should be construed as a solicitation, offer, recommendation, and representation of suitability or endorsement of any security, investment or strategy.

Important Notice

Emerio Banque would like to advise its customers to report any suspicions which they may have regarding the identity of any intermediary who promotes products or services offered by us or any intermediary bearing similar names. You should verify with Emerio Banque by calling our Customer Service Number on +44 203 059 7831 or emailing help@emeriobanque.com

Please also be aware of bogus SMS messages and voice message calls or fraudsters who impersonate the staff of Emerio Banque.

We have recently become aware of a number of entities with different names misrepresenting themselves as associates, partners or agents of Emerio Banque.

Please be informed that Emerio Banque is not associated with nor do we have any business connections or dealings with such institutions.

Emerio Banque takes all information regarding suspicious fraudulent activity very seriously. Please immediately inform us at compliance@emeriobanque.com if you suspect or are approached by persons misrepresenting or impersonating Emerio Banque and/or its officials. We will make investigations and will take legal action where necessary.