Trade row to have ‘limited impact’ on HK

Investors should not be overly pessimistic about Hong Kong’s equity market outlook as it has already faced further downward pressure due to the ongoing trade dispute between China and the US, says Ceajer Chan Ka-keung, adjunct professor of Hong Kong University of Science and Technology’s Business School.

The former secretary for financial services and the treasury made these comments during a panel discussion in the 40th anniversary conference of Chinese Executives Club, which is under the Hong Kong Management Association.

Hong Kong’s economy is very sensitive to any movements in its stock market which also affects the city’s real estate market, said Chan. But he added that any broader contagion affecting the city was unlikely.

HK’s stock market suffered a fourth straight session of losses on Tuesday, sending it into bear-market territory as the specter of a worsening trade spat continues to damp investor sentiment. Lingering concerns over US interest rate hikes and emerging market currency turmoil were also exacerbating the situation.

Escalating tensions between the world’s two largest economies, US President Donald Trump last Friday said further tariffs on $267 billion worth of Chinese imports were ready and could be unveiled shortly.

The US doesn’t want any potential opponents to challenge its dominance on the global stage. This is one of the reasons it started the trade dispute with China, said Chan. He added that the situation had now gone beyond negotiations for both sides.

Meanwhile, with production lines set up overseas, many multinational conglomerates could escape much of the fall of the trade war. This is because it is easy for them to transfer production activities. But smalland medium-size companies faced harsher realities due to their relative weaknesses in areas such as capital, noted Ng Wang-pun, president of the Chinese Manufacturer’s Association of Hong Kong.

While the escalating trade war poses more challenges, the newly unveiled album Bauhinia 40 would be an excellent reference book, said club president Lou Wing-man. This is because it consists of all the achievements and life lessons of previous presidents of Chinese Executives Club, added Lou.

Since it began in 1976, Chinese Executives Club has provided support and services to entrepreneurs and managers in the special administrative region.