According to the president of the US Chamber of Commerce in Hong Kong, companies in Hong Kong are facing a “conglomerate new normal” as the city faces challenges on multiple fronts.
The ongoing Covid-19 crisis, along with the recent passing of the national security law and troubled US-China trade relations, are among the list of top concerns for companies based in the Asian financial center, Tara Joseph told CNBC’s Street Signs Asia. on Thursday.
“Hong Kong has set a new standard in the past two years. We are dealing with Covid. There is a lot of change in the terms that Hong Kong is at a political tipping point,” she said, referring to the new national security law that China passed last year. for Hong Kong and the revision of the electoral system last month. The changes could further curtail the city’s freedoms, critics say.
Joseph added that these factors were further complicated by the friction between China and the US – in terms of trade and politics. “All those items are at the top of the list for businesses here,” she said.
For example, let’s take sanctions between the US and China. They add to the risks of being here.
Tara Joseph
president, American Chamber of Commerce in Hong Kong
The world’s two largest economies signed a phase 1 trade deal in January, which allowed some of the tensions of the past two years to be postponed.
Although the Biden administration has vowed to use “all available instruments” to counter China’s unfair trade practices, it has yet to clarify its position on how to deal with China with tariffs that have harmed businesses in both countries.
“Let’s take sanctions between the US and China, for example. They increase the risks of being here,” Joseph noted. She said companies in Hong Kong are “rethinking, possibly reassessing and measuring risks here too.”
Travel worries
While Hong Kong has managed to contain the Covid-19 pandemic, Joseph argued that the city’s travel restrictions and strict quarantine measures have led companies to reassess their long-term presence in the city.
“The Covid issue and the quarantines are taking it to a personal level,” she said. Those living in Hong Kong have not been able to visit their families and “that is starting to become a personal concern.”
Philippe Lopez | AFP | Getty Images
That’s where we see people starting to wonder how long they can stay here. And whether it will be effective for them in the long term to be here, ”said Joseph.
And that could hurt Hong Kong’s reputation as a global financial center.
“Hong Kong is also seen as a place where you connect to travel, where you have freedom of movement. And if we can’t, it will affect the city’s competitiveness. A growing concern,” Joseph noted.