According to the president of the US Chamber of Commerce in Hong Kong, matters in Hong Kong are confronted with a ‘composite new norm’ because the city is facing challenges in several areas.
The ongoing Covid-19 crisis, coupled with the recent adoption of national security legislation and troubled trade relations between the US and China, is one of the main concerns for companies in the Asian financial center, Tara Joseph told CNBC’s “Street Signs Asia ” said. on Thursday.
“Hong Kong has had a new norm over the last two years. We are dealing with Covid. We have made many changes regarding the fact that Hong Kong is politically at a turning point,” she said, referring to the new national security law China passed for Hong Kong last year and the overhaul of its electoral system last month. According to critics, the changes could further restrict the city’s freedoms.
Joseph added that these factors were further complicated by the China-American friction – in terms of trade and politics. “All of these items are at the top of the list for businesses here,” she said.
Let’s take sanctions between America and China, for example. This adds to the risks of being here.
Tara Joseph
President, US Chamber of Commerce in Hong Kong
The two largest economies in the world signed a phase-one trade agreement in January, bringing some delay to the tensions of the past two years.
While Biden’s government has promised to use ‘all available tools’ to counter China’s unfair trade practices, it has yet to make clear its position on how to deal with tariffs with China that have hurt businesses in both countries.
“Let’s take sanctions between America and China, for example. It adds to the risks of being here,” Joseph notes. She said companies in Hong Kong “reconsider, and possibly assess risk here as well.”
Travel concerns
While Hong Kong was able to curb the Covid-19 pandemic, Joseph argued the city’s limited travel and strict quarantine measures meant that businesses had to reevaluate their long-term presence in the city.
“The Covid issue and the quarantines bring it to a personal level,” she said. Those living in Hong Kong have not yet been able to visit their families and ‘it’s becoming a personal matter.’
Philippe Lopez | AFP | Getty Images
“This is where people see how long they can stay here. And whether they will be effective here in the long run,” Joseph said.
And that could hurt Hong Kong’s reputation as a global financial hub.
“Hong Kong is also seen as a place where you connect with travel, where you can have freedom of movement. And if we can not do that, it will affect the competitiveness of the city. A growing concern,” Joseph notes. .