Caught in the struggle between Beijing and Washington, can Hong Kong pull through the hardship without special trade status? Is Trump’s announcement symbolic or destructive for the territory? Will the Hong Kong dollar peg fall apart? We review these questions one by one in this analysis.
As a major global financial hub, and one of the most open economies in the world, Hong Kong is consistently ranked top in terms of economic competitiveness and institutional soundness.
However, the territory is not immune to the struggle between Beijing and Washington. In response to the introduction of National Security Law in Hong Kong at the end of May, the Trump administration announced plans to eliminate US policy exemptions for
Hong Kong. After examining the options one by one, we found that the revocation of special status will leave Hong Kong in a similar position as before, unless the US opts for the “nuclear option” – isolating Hong Kong from the Wall Street.
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