China News Agency, Hong Kong, June 2 Question: Interview with Lei Dingming: There are not many "economic cards" that the US "sanctions" Hong Kong can play
China News Agency reporter Zhang Xiaoxi
Regarding the United States’ claim that it would impose so-called “sanctions” on Hong Kong, Lei Dingming, former director of the Department of Economics of the Hong Kong University of Science and Technology, said in an exclusive interview with a reporter from China News Service in Hong Kong that the United States “sanctions” Hong Kong, in fact, can be used against There are not many "brands". Whether it is from tariffs, finance or exchange rates, the impact of US "sanctions" is very small. He also pointed out that the most important thing for Hong Kong to do a good job in the economy is to solve social problems.
The Third Session of the Thirteenth National People's Congress passed the "Decision of the National People's Congress on Establishing and Improving the Legal System and Enforcement Mechanism of the Hong Kong Special Administrative Region to Maintain National Security" by a high vote. The United States immediately threatened to unilaterally change its trade policy with Hong Kong Implement so-called "sanctions".
In this regard, Lei Dingming pointed out in an interview that about thirty or forty years ago, Hong Kong's economy was very dependent on the United States, because at that time Hong Kong was an industrial city, mainly exporting to the United States. However, as the times have changed, Hong Kong has transformed into a service-oriented city, and its exports to the United States continue to decrease. In 2019, the total export of Hong Kong's domestic products to the United States has fallen to less than 500 million US dollars, which is approximately equal to 0.13% of Hong Kong's GDP. This is far from Hong Kong's exports to the United States in the 1980s. Therefore, even if the United States cancels Hong Kong's status as an independent customs territory and imposes high tariffs on Hong Kong's domestic products, the impact on Hong Kong will be minimal.
Regarding the trade in goods between Hong Kong and the United States, Lei Dingming believes that the United States "can't do anything at all"; in terms of financial services, he believes that the United States has great interests in Hong Kong. If the United States wants to strike Hong Kong from the financial side, it is actually in Crack down on US companies in Hong Kong. In his view, the main reason why US-funded enterprises chose to develop in Hong Kong was because they were interested in the Chinese market, and hoped that they could enter the mainland market more conveniently through Hong Kong. If the US side imposes “sanctions” on US-funded enterprises in Hong Kong, it will affect the interests of US-funded enterprises.
So will the United States withdraw from Hong Kong? Lei Dingming said that there are two possibilities, one is that the United States reduces or withdraws direct investment in Hong Kong, and the other is the outflow of hot money, or the sale of financial assets in Hong Kong, and neither of these methods will have any effect on Hong Kong. influences.
Lei Dingming said that direct investment from the United States to Hong Kong accounted for a small proportion of Hong Kong’s total foreign investment, while mainland investment accounted for a large proportion of Hong Kong’s overall foreign direct investment. We can "top it up" and believe that the country will provide firm support to Hong Kong.
He also said that since the "financial tsunami" in 2008, Hong Kong's monetary base has increased by more than one trillion Hong Kong dollars, and a large amount of funds have poured into Hong Kong. This "huge amount of money" may be more harmful to Hong Kong than good. It will cause huge inflation or asset pressure in Hong Kong. Therefore, even if there is capital outflow, the Hong Kong economy will not be damaged.
Regarding the implementation of the linked exchange rate in Hong Kong, he said that at the end of March this year, Hong Kong’s official foreign exchange reserve assets were close to 440 billion US dollars. With such a huge reserve, there is basically no need to worry about the collapse of the Hong Kong dollar. Hong Kong’s adoption of the linked exchange rate is actually very beneficial to the United States, and it does not require American consent and approval at all.
"All methods are affecting the interests of the United States." Lei Dingming said. He believes that the Hong Kong Special Administrative Region Government and the Hong Kong Monetary Authority need to have "bottom-line thinking" and prepare for "two-handedness" in the face of possible crises. In the event of a crisis, they can consider adopting a flexible approach to better maintain Hong Kong's economic benefit.
Lei Dingming also talked about Hong Kong's national security legislation. He said that due to various reasons, Hong Kong has never been able to complete the legislation of Article 23 of the Basic Law of the Hong Kong Special Administrative Region of the People’s Republic of China. Without laws to protect national security, Hong Kong society is prone to being exploited or even turbulent. This will have a serious impact on the status of Hong Kong's international financial center.
He pointed out that in the past year, the Hong Kong society has suffered a double blow from the turmoil and epidemic. The economy has shown negative growth. If the violence continues, young people will spend their time on things that are not beneficial to society. The prospects for Hong Kong’s economy I am afraid it will still be affected.
"Last year's situation, it can be said that it was completely'invisible to light.' This year, with the Hong Kong-related national security legislation, it feels like'seeing a beam of light from the tunnel.'" Lei Dingming said. He believes that as long as Hong Kong stabilizes, the economy is still likely to recover, and he hopes that the legislative work will be completed as soon as possible to bring more "brightness" to the stable development of Hong Kong. (Finish)