Stephen Roach, former Morgan Stanley Asia chairman, believes Hong Kong’s “demise” is due to domestic politics, China’s issues, and U.S.-China tensions. Others fear the declining political risks in doing business there.
Stephen Roach Proclaims the End of Hong Kong
Once viewed as a friend of China and former chairman of Morgan Stanley in Asia, Stephen Roach has declared that Hong Kong is finished. Roach attributed the city’s “demise” to its domestic politics, China’s structural issues, and global developments, particularly worsening U.S.-China tensions. “It pains me to admit it, but Hong Kong is now over,” Roach wrote in a commentary in the Financial Times.
Factors Contributing to Hong Kong’s Decline
Roach pinpointed former Chief Executive Carrie Lam’s introduction of the extradition bill as the turning point for Hong Kong’s decline. This move led to large-scale democratic demonstrations in 2019, followed by Beijing’s imposition of the national security law in 2020, shredding any remaining semblance of local political autonomy. Economic decline ensued, driven by waning confidence in the business and investment environment, as well as the legal framework, prompting foreigners, firms, and even locals to leave the city.
Confluence of Issues
Roach identified three factors contributing to Hong Kong’s decline: internal politics, China’s economic structural problems, and global developments. The local political stability was disrupted by the 2019-2020 protests, leading to Beijing’s imposition of the national security law. China’s economic woes, including high debt, deflation, and an aging population, have also impacted Hong Kong. Additionally, the worsening U.S.-China rivalry and the “friendshoring” campaign have strained relations and trading alliances in the region.
Source : China’s Minimum Wage Guide (Updated as of February 19, 2024) – Thailand China Business News