Hong Kong: The city's finance chief has issued a warning that Hong Kong must be fully prepared for the worst of upcoming geopolitical tensions, with Chinese companies at risk of being delisted from US stock exchanges.
According to Financial Secretary Paul Chan Mo, more than 150 Chinese companies are currently listed on the US Securities and Exchange Commission's (SEC) preliminary list of companies that will be delisted from US exchanges in 2020 as a result of the Holding Foreign Companies Accountable Act. Comment PO on Saturday.
Asked whether Hong Kong could help Chinese companies facing these risks, Chan replied that when China and the US were talking about auditing practices for mainland companies listed on US exchanges, The city was not part of those discussions. But as you can see... the mainland wants to come to an agreement. On the other hand, it is not clear whether the parties can come to an agreement.
It is uncertain," he said at a symposium on the city's potential development as a global financial hub, hosted by the media museum Hong Kong News-Expo.
While Chan acknowledged that some geopolitical factors such as the conflict between the US and China over Taiwan were difficult to predict, the city had to be fully prepared for the worst.
Apart from politics, there are many economic interests involved in future development, which is quite complex.
Since Hong Kong's economy is so small, we must rely on the mainland as our main source of economic growth, he said.
“We can only accurately estimate risk when we create our risk plan. No matter how frustrating the circumstances, when thinking about the bottom-line, [we] must think clearly and do what we need to do. Must be ready.
Chan also noted that Hong Kong would do its best to make it easier for mainland companies that wanted to list because listing thresholds were different there and in the US.
However, we all expect that the businesses listed in Hong Kong will adhere to the same standards of excellence as the other businesses listed here.
In addition to adding Alibaba to the SEC watch list on Friday, three other mainland Internet businesses—Mogu, Cheetah Mobile, and Boki Holding—as well as a Hong Kong conglomerate, metal stamping company Highway Holdings, were also added.
Other Chinese businesses that are at risk include operators of video-sharing platforms Bilibili and NIO, as well as e-commerce service providers JD.com and Pinduoduo.
Regarding future city development, Chan explained that the uncertainty created by changes in the global economic environment, including changes in politics, has made it necessary to improve risk management.
Chan claimed that he oversaw a group of inter-financial management organizations that regularly looked at financial market activity. If abnormal or widespread short selling is detected, the transaction concerned will be stopped, he added.
Chan said he thought that while mortgage repayment costs would rise, a rise in US interest rates would not lead to a sharp decline in the local real estate market.
For the longer term, Hong Kong should also focus on cutting-edge technologies the government is looking for opportunities to seize to attract such businesses, he said.
Additionally, he said Hong Kong should contribute to the country's overall development by encouraging more mainland businesses to expand internationally and pursue the internationalization of the yuan.
The finance chief said Hong Kong should take climate change seriously and reach carbon neutrality by 2050. He stressed that to achieve these goals, the government has introduced several green products such as silver bonds and ibonds, which are linked to inflation.
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