Businesses in Hong Kong are facing a “new normal” as the city faces challenges on several fronts, according to the president of the US Chamber of Commerce in Hong Kong.
The ongoing Covid-19 crisis, along with the recent adoption of the national security law and the disrupted trade relations between the US and China, are among the most important concerns for companies in the Asian financial center, Tara Joseph told Street Signs Asia ”on CNBC on Thursday.
“Hong Kong has had a new normal in the last two years. We have been dealing with Covid. We have a lot of changes in terms of the fact that Hong Kong is at a political turning point,” he said. she, referring to the national security law China adopted Hong Kong last year and reviewing his electoral system last month. The changes could further reduce 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 of these items are at the top of the list for companies here,” she said.
Take sanctions, for example, between the US and China. These 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 agreement in January, easing some tensions over the past two years.
While the Biden administration has promised to use “all available tools” to counter China’s unfair trade practices, it has not yet clarified its position on how it will handle tariffs with China that have affected business in both countries.
“Let’s take sanctions, for example, tit-for-tat between the US and China. These add to the risks of being here,” Joseph noted. She said Hong Kong companies are “rethinking, potentially re-evaluating and measuring risk here now.”
Travel concerns
While Hong Kong managed to contain the Covid-19 pandemic, Joseph argued that the city’s restrictive travel and strict quarantine measures led companies to re-evaluate their long-term presence in the city.
“The Covid problem and quarantine bring it to a personal level,” she said. Those living in Hong Kong could not visit their families and “this is starting to become a personal concern.”
Philippe Lopez | AFP | Getty Images
“There we see that people are starting to question how long they can stay here. And if being here will be effective for them in the long run,” Joseph said.
And that could affect Hong Kong’s reputation as a global financial center.
“Hong Kong is also seen as a place where you connect to travel, where you can have freedom of movement. And if we can’t do that, it will affect the city’s competitiveness. a growing concern, “Joseph noted.