A general view shows commercial buildings in the Central district of Hong Kong on March 22, 2021.
(ANTHONY WALLACE / AFP)
HONG KONG – The global economy is expected to recover from the pandemic in the second half of the year, but challenges and uncertainties remain, with a possible financial crisis brewing, economic pundits warned on Tuesday at the 2021 Hong Kong Economic Summit.
But they all cast a vote of confidence in Hong Kong’s economy, noting the resilience of the financial hub and its close ties with the Chinese mainland.
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Financial Secretary Paul Chan Mo-po said that with the start of vaccinations, loose monetary policies, and large-scale fiscal stimulus measures by governments around the world, 2021 could lead to a year of recovery for the global economy, and the growth rate may accelerate in the second half.
Financial Secretary Paul Chan Mo-po said that China has set an economic growth target of more than 6 percent this year, which may drive Hong Kong’s export performance
Hong Kong’s economic growth this year will be between 3.5 percent to 5.5 percent, Chan said.
Chan noted that China has set an economic growth target of more than 6 percent this year, which may drive Hong Kong’s export performance. The special administrative region government is striving to resume exchanges with other parts of the world but global tensions remain, judging from the recent Sino-US dialogue, he said.
Peter Wong Tung-shun, deputy chairman and chief executive of HSBC, told the summit that the impact of the epidemic on the global economy has not fully emerged, and the world is facing a long, uneven and uncertain recovery.
Wong said that an unprecedented monetary easing of major central banks, zero-interest rates in major developed countries, and an increase in the scale of balance sheets, could all aggravate an unstable international financial system, which may pave the way for a financial crisis.
Eddie Yue Wai-man, chief executive of the Hong Kong Monetary Authority, said that rumors or false accusations about Hong Kong’s financial market have been circulating, which weaken international investors’ confidence in Hong Kong.
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Noting that the HKMA has been in close communication with over 15,000 market participants and stakeholders at more than 60 online exchange events to clarify Hong Kong’s stable financial environment, Yue said the HKMA will continue its external communication to reinforce the city’s status as a robust financial hub.
Yue expressed confidence in Hong Kong’s fintech development, noting that there are currently eight virtual banks in Hong Kong, the most in Asia, with 580,000 accounts open and HK$20 billion (US$2.58 billion) in deposits.
Hong Kong General Chamber of Commerce CEO George Leung Siu-kay said that the pandemic has caused irreversible changes in the business environment. If Hong Kong enterprises are to survive, they must accelerate digital transformation to reduce rent and labor costs, Leung said.
Leung said that a market recovery requires a lot of investment, where large companies have an advantage over small and medium-sized enterprises. The different funds provided by the government will be decisive factors in the recovery of SMEs, he said.