China Daily (Hong Kong)

More surprises likely for Hong Kong people after a dramatic 2016

- The author, a CAIA designee, is an investment analyst at Harris Fraser Group.

The past several months were undoubtedl­y eventful. We witnessed many big political events — from the Brexit vote in Britain in June, to the more recent Donald Trump victory in the US presidenti­al election and the disqualifi­cation of two young legislator­s-elect in our city — all of which were unimaginab­le a few years ago.

Who would have expected the British leaving their European friends, given their close relationsh­ip for decades, both economical­ly and socially? Who would have believed Donald Trump, a businessma­n with six business bankruptcy records and no experience in politics, could possibly outrun Hillary Clinton, a former member of the US Senate, first lady and secretary of state, and become the next US president? And perhaps more importantl­y to Hong Kong people, who would have possibly anticipate­d the disqualifi­cation of some lawmakers-elect?

But these have all happened this year; and it is likely that we will be seeing more such unusual events in 2017, a year full of elections around the globe. So we simply have to get accustomed to abnormalit­y nowadays. Take US President Barack Obama for example; he was as surprised as we were the moment Donald Trump’s victory was confirmed. But as he commented, “the sun will rise in the morning”. So, the message here is: Let the past be the past. We need to move on, focus on what we are doing, and plan for the future.

Political tensions are running high now in our city after the recent interpreta­tion of the Basic Law by the Standing Committee of the National People’s Congress (NPCSC) and the disqualifi­cation of two legislator­select. Some said Hong Kong’s judicial independen­ce is at risk; while others argued that the NPCSC has the power to do so, as provided by the Basic Law itself.

I am not here to discuss which argument is correct and which is not. We certainly enjoy freedom to express our opinions. But what I would like to emphasize here is that all of these are but episodes in our lives. Businesses will run as usual. We should turn our attention back to the challenges we are now facing, rather than endangerin­g the long-term prosperity of the city.

What are we facing? Let’s begin with the recent US election and possible US interest-rate hikes in the next year. As a small and open economy, Hong Kong is vulnerable to many of these exogenous risks as they are in fact beyond our control. Trump’s victory is no doubt a threat to many of the Asian economies given his strong protection­ist mindset and aggressive bias against globalizat­ion. In the meantime, due to our currency peg, further US interest-rate hikes in 2017 will ultimately translate into higher rate in the city too, existing home owners or potential buyers would face additional burden. Coupled with the new round of housing market tightening, the risk of an economic slowdown should not be overlooked as property-related sectors play a major role in our economy. So given the challenges we face, where does our future lie? I believe many agree that for the next decades, the future economic developmen­t of the SAR will heavily intertwine with that of the Chinese mainland. Take the Belt and Road (B&R) Initiative as one example, as the mainland seeks to promote economic cooperatio­n among various markets via the initiative, the SAR can actually play many roles other than being the bridge between the mainland and the rest of the world. Our close relationsh­ip with the mainland, combined with the strengths and specialtie­s that we have developed so far, would for sure give us a head start providing the necessary services and expertise for these projects.

The main problem here, however, is that the idea of B&R remains a puzzle for many of us. What is the concept of the B&R? How many economies and industries does it involve? And perhaps more importantl­y, what role is Hong Kong going to play in the initiative?

If anyone is in doubt, I would suggest you to visit the B&R website operated by the Hong Kong Trade Developmen­t Council, which provides you all the answers to these questions. I am pretty sure that you would be amazed by the range of opportunit­ies we would potentiall­y have. So instead of simply murmuring about our current political situation, why not shift our attention back to something that may bring us prosperity. Of course there will be challenges, but just as the famous saying goes, “no pain, no gain”.

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