(Economic Observation) The United States threatened to make Hong Kong no longer "special" and cancel the separate customs zone "unreasonable and unprofitable"
China News Service, Beijing, June 4th (Xia Bin) Recently, some US politicians have successively stated that they will withdraw the special treatment of Hong Kong and the status of Hong Kong as a separate customs zone, which is unreasonable and unprofitable.
The Ministry of Commerce spokesman Gao Feng said on the 4th that the legal basis for the status of Hong Kong’s separate customs zone originated from the WTO agreement, was confirmed by the Chinese government through the Basic Law of the Hong Kong Special Administrative Region of the People’s Republic of China, and was established by the WTO’s multilateral rules. The legal status recognized by other members does not come from a member alone.
In other words, the status of Hong Kong as a separate customs zone is not given by the United States, nor is it unilaterally deprivable of its abolition.
More critically, once the United States makes sanctions to make Hong Kong no longer "special", the United States should worry about "smashing its own foot."
The Financial Secretary of Hong Kong, Chen Maobo, pointed out that the Hong Kong government has already made a judgment and formulated a response plan for the possibility of the United States unilaterally canceling the special tariff treatment for Hong Kong. But overall, the actual impact of this measure on Hong Kong may be small. He revealed that every year goods produced locally in Hong Kong and exported to the US market account for less than 2% of Hong Kong's local manufacturing industry, with a value of only 3.7 billion Hong Kong dollars, accounting for less than 0.1% of Hong Kong's total exports.
JPMorgan Chase issued a report that, according to its preliminary assessment, even if the United States revokes Hong Kong's special status, the direct impact on Hong Kong's economy is expected to be limited, mainly because US exports accounted for only 1.2% of Hong Kong's total GDP last year.
It is worth noting that Hong Kong is one of the largest trade surplus regions in the United States. The main goods are alcohol, meat and agricultural products, which are very rare in the US trading system. At the same time, there are more than 1,300 U.S.-funded enterprises operating in Hong Kong, and these U.S. enterprises enjoy convenient access to the Mainland and Southeast Asia in Hong Kong.
Trade is only one aspect of the negative impact. If the United States does not recognize the status of Hong Kong as an independent customs territory, it may simultaneously restrict certain companies from entering Hong Kong or set up regional headquarters in Hong Kong, and impose certain controls on the inflow and outflow of funds from Hong Kong, which will discourage the investment confidence of large multinational companies in Hong Kong.
According to Wang Dongsheng, chairman of the Hong Kong General Chamber of Commerce and vice chairman and chief executive of the Hongkong and Shanghai Banking Corporation Limited, US sanctions not only hurt Hong Kong, but also the United States itself, as well as the entire Asia-Pacific region.
Chen Maobo said that the biggest impact of the corresponding U.S. measures may be the impact on investor confidence. However, after some US politicians made relevant remarks, Hong Kong’s stock, futures and currency markets did not fluctuate significantly, the Hong Kong dollar exchange rate remained strong, and Hong Kong did not monitor large-scale capital outflows.
In fact, Hong Kong is returning to a more stable and predictable environment. Chen Maobo said that the Hong Kong-related national security legislation is intended to restore stability and security to the Hong Kong society and business investment environment. Generally speaking, businesses that normally operate normally do not need to worry. Looking ahead, Chinese companies already listed overseas may be more actively considering returning to the Hong Kong market for listing.
NetEase and JD.com have been approved for a secondary listing in Hong Kong, and the “gravity” of the Hong Kong capital market is still there.
Chen Maobo bluntly stated that China, as the world's second largest economy, is constantly deepening reform and opening up, and the resulting demand for financial services is the most solid support and motivation for Hong Kong to maintain its status as an international financial center. This will allow Hong Kong to continue to move forward in a changing chess game. (Finish)