SINGAPORE — There might be some great news for Hong Kong’s economy after 2 years of anemic development, according to one economic expert.
“I think, frankly speaking, there’s a lot of headwinds ahead for Hong Kong,” stated Hao Zhou, a senior emerging markets economic expert at Commerzbank.
“But, from a GDP perspective … probably the Hong Kong economy has bottomed out this year. After two years’ sluggish growth, probably we’re going to see positive growth for next year and also 2022,” he informed CNBC’s “Squawk Box Asia” on Thursday.
The 3rd quarter this year was Hong Kong’s 5th successive quarter of year-on-year contractions, however there were likewise some indications of healing. Its economy diminished 3.5% in the July to September quarter, as compared to a 9% contraction in the previous quarter.
The federal government likewise modified the genuine GDP projection for 2020 from a contraction of in between 6% and 8%, to a 6.1% contraction.
However, Covid-19 cases have actually rebounded once again just recently in the city, leading authorities to reimpose constraints.
But normally, the post-Covid healing throughout Asia, led by China, will benefit Hong Kong ahead, Zhou stated.
The Asian monetary center’s economy has actually been struck hard by successive crises: from the U.S.-China trade war that heightened in 2018, to the months-long demonstrations which shuttered stores and significantly struck tourist in 2015. Now, Hong Kong is likewise dealing with the difficulties of managing the pandemic and its financial effect.
U.S.-Hong Kong relations under Biden
Incumbent U.S. president Donald Trump had actually relocated to withdraw Hong Kong’s unique trading status with the U.S. previously this year. It can be found in reaction to China’s approval of a suggested security law that would efficiently bypass the legislature in the unique administrative area.
But with the inbound administration of President-choose Joe Biden in January, concerns have actually been raised about what that indicates for Hong Kong’s relationship with the U.S.
Zhou mentioned that as long as stress stay in between the U.S. and China, it will not bode well for Hong Kong.
“This will be very, very difficult. The most important is not Hong Kong and the United States — I think most important might be China and the U.S.,” Zhou stated.
“This kind of global competition between China and the U.S. will continue. In this case for Hong Kong, basically the road ahead against this kind of geocritical dynamics will still be very challenging … in the short term,” he informed CNBC.