‘Security law will keep HK stable’

Cheah: It can boost economy in the long run

The Hong Kong national security law can help maintain the country’s political and economic stability in the long run despite creating short-term tension and uncertainty, says Datuk Seri Cheah Cheng Hye (pic).

The Malaysian-born Cheah, a fund manager based in Hong Kong, is often described as the Warren Buffett of Asia.

Cheah, who is Value Partners Group cochairman and co-chief investment officer, said investors remained calm towards the recently passed Hong Kong national security law.

He said most of the investors were relieved with the passing of the law as part of the solution to the region’s current situation.

“Both China and Britain have agreed that the national security law is part of the basic law upon sovereignty being transferred back to China in 1997.

“Hence, experienced investors are well aware that the introduction of the Hong Kong national security law is just a matter of time.

“The delay of the implementation actually caused social insecurity and concerns for many parties,” he said in a recent interview with the Hong Kong Economic Times.

Cheah believed there would be mixed reaction among the people of Hong Kong, but the law would act as a cornerstone for the region’s progress.

“The introduction of the national security law can reduce conflict in the region in the long run although there might be tension and uncertainty at present,” he said.

He said despite the major movement in the Hong Kong stock exchange, the situation would improve in time and people would realise that the law would bring more benefits in the long run.

He predicted that the stock exchange would be unstable for now while awaiting the United States’ reaction.

“If the US reacts negatively, there might be a negative impact on Hong Kong’s stock exchange, but it will not be as bad as predicted due to the decline in dependence between both economies.

“With a two-third market share of Hong Kong’s stock exchange coming from Chinese investments, the stock exchange performance relies more on China’s economy than the US.

“The market is concerned that the US might withdraw the special economic privileges, but the impact will go both ways as Hong Kong is the overseas base for many American corporations. Their actions can damage Hong Kong but cannot kill it,” he said.

Cheah also said that with the introduction of the national security law, Hong Kong could now focus on other matters such as economic development and social reforms.

“Measures should be in place to close the income gap, make housing more affordable and boost the economy so that the younger generations can benefit,” he added.