#Newspaper
US-China spat puts future of Hong Kong dollar in the spotlight
//Hong Kong has become a focal point in tensions between the US and China, which means that the linked exchange-rate system in place for the past few decades — tying the local dollar to the US dollar — is also in the spotlight.
//The head of the Hong Kong Monetary Authority, the city’s de facto central bank, told the Financial Times recently that the task of defending the Hong Kong dollar has become easier in a world of rock-bottom interest rates.
//The Hong Kong dollar came under fierce pressure too.
//These days, the gap between three-month US and Hong Kong rates is about half a percentage point, which means the incentive for holding the local currency is small.
//if the link were to come under sustained pressure, and higher interest rates proved inadequate to stem outflows, the HKMA might not look to the US Federal Reserve to supply a flow of US dollars.
//That Hong Kong would rely on China rather than the US for support in maintaining the level of the Hong Kong dollar is a sign of the politicisation of central banks, as the stand-off between Beijing and Washington endures.
//In that context, the US central bank would be “crazy” to allow a drawdown of US dollars to the HKMA “without permission from the US Treasury”
//confidence in the system does not depend simply on the weapons that the HKMA is able to deploy... In the past, the strength of the exchange-rate system was ultimately about confidence in the future of Hong Kong as the meeting ground between the worlds of Western capitalism and so-called socialism with Chinese characteristics.
//But as demonstrated this week by the new national security law for Hong Kong, hurriedly approved by Beijing, it is now very much a Chinese city.
Full Article: Financial Times, (01-Jul)
#HongKong #Economic #exchangerate
#US #China #NationalSecurityLaw #HKMA
US-China spat puts future of Hong Kong dollar in the spotlight
//Hong Kong has become a focal point in tensions between the US and China, which means that the linked exchange-rate system in place for the past few decades — tying the local dollar to the US dollar — is also in the spotlight.
//The head of the Hong Kong Monetary Authority, the city’s de facto central bank, told the Financial Times recently that the task of defending the Hong Kong dollar has become easier in a world of rock-bottom interest rates.
//The Hong Kong dollar came under fierce pressure too.
//These days, the gap between three-month US and Hong Kong rates is about half a percentage point, which means the incentive for holding the local currency is small.
//if the link were to come under sustained pressure, and higher interest rates proved inadequate to stem outflows, the HKMA might not look to the US Federal Reserve to supply a flow of US dollars.
//That Hong Kong would rely on China rather than the US for support in maintaining the level of the Hong Kong dollar is a sign of the politicisation of central banks, as the stand-off between Beijing and Washington endures.
//In that context, the US central bank would be “crazy” to allow a drawdown of US dollars to the HKMA “without permission from the US Treasury”
//confidence in the system does not depend simply on the weapons that the HKMA is able to deploy... In the past, the strength of the exchange-rate system was ultimately about confidence in the future of Hong Kong as the meeting ground between the worlds of Western capitalism and so-called socialism with Chinese characteristics.
//But as demonstrated this week by the new national security law for Hong Kong, hurriedly approved by Beijing, it is now very much a Chinese city.
Full Article: Financial Times, (01-Jul)
#HongKong #Economic #exchangerate
#US #China #NationalSecurityLaw #HKMA
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#PressConference #TheHongKongMedicalAssociation [#HKMA]
Why is Hong Kong not capable of...?
A reporter asked, “why can Macau and Singapore preform 11000 and 20000 test respectively? Is the way of testing different? Is the nasopharyngeal [nucleic acid] test there different from the deep throat saliva test in Hong Kong?”
Choi Kin, chairman of HKMA, picked up the microphone immediately and answered, “The Chief Executives are different.”
Source: Telegram Channel
https://t.me/hktgb
Translated by: Hong Kong Echo
#Coronavirus #VirusTest #Macau #Singapore
Why is Hong Kong not capable of...?
A reporter asked, “why can Macau and Singapore preform 11000 and 20000 test respectively? Is the way of testing different? Is the nasopharyngeal [nucleic acid] test there different from the deep throat saliva test in Hong Kong?”
Choi Kin, chairman of HKMA, picked up the microphone immediately and answered, “The Chief Executives are different.”
Source: Telegram Channel
https://t.me/hktgb
Translated by: Hong Kong Echo
#Coronavirus #VirusTest #Macau #Singapore
#Column #Opinion #Aug24 #SpecialStatus #NationalSecurityLaw
Year 2020: The Stranding and Disconnected World
Part 1 - 2
Since Beijing's forceful imposition of the National Security Law in Hong Kong, thrusting the new legislation into the city’s constitution the Basic Law, how the Central and HKSAR governments extends juridiction through the law around the world is no longer the only main issue. In one way or the other, most democratic governments in the free world have suspended their extradition treaty with China and Hong Kong.
Although, the SAR government insisted that the U.S. sanctions has no legal effect in Hong Kong.
Several years ago, when the United States sanctioned North Korea and Iran, Hong Kong was both guarding and avoiding the U.S., while warily sponsoring China’s allies.
At a time in 2020, the Hong Kong Monetary Authority (#HKMA) had issued a statement to financial institutions operating in Hong Kong, claiming that impact of the U.S. sanction is negligible. So is the Hong Kong Dollar no longer pegged to U.S. Dollar?
Suppose that the U.S. government will strictly enforce the sanction, and put an end to financial institutions providing services to the 11 individual being sanctioned, will the U.S. government also consider revoking the green-peg, or even withdrawing U.S. bonds from Hong Kong and China financial markets?
No one can predict where this financial warfare is leading to. But any reasonable Hongkonger should expect the Hong Kong and Central governments to turn these 11 people in to face the U.S. sanction. As Le Yucheng, China’s foreign vice-minister said in an interview, “we must stay focused without being swayed by any extreme forces, keep to the right direction of the bilateral relationship to prevent US-China relationship from spiraling out of control or getting derailed. This is also to avoid worsening of the hard-won trade deals.”
If any financial predator targets Hong Kong’s linked exchange rate system at this time, how much financial reserve does Hong Kong government have to defend the linked exchange rate? We must not forget that the government has been pouring out public money in enormous infrastructure projects like Hong Kong-Zhuhai-Macau bridge, the new runway in airport and Lantau Tomorrow Vision.
Besides, the Central government might need substantial amount of funds from the Hong Kong government to reactivate its trade relationship with the U.S..
One must note that, in China, countless farmlands have been wiped out in recent mass floodings as the #CCP called for food saving. Local authorities sprang into action with proposals targeting food wastage and food recycling, or “operation empty plate”, an initiative reactivated anew by Xi.
Hong Kong could possibly resume its role in supporting China as if during Cultural Revolution: endeavored to purchase American soybeans or Australian beef for the motherland, feeding hungry fellows.
Image: CNN
#FoodShortage #FoodSecurity #Flooding #China #CCPControl #Xi #ExtraditionTreaty
Year 2020: The Stranding and Disconnected World
Part 1 - 2
Since Beijing's forceful imposition of the National Security Law in Hong Kong, thrusting the new legislation into the city’s constitution the Basic Law, how the Central and HKSAR governments extends juridiction through the law around the world is no longer the only main issue. In one way or the other, most democratic governments in the free world have suspended their extradition treaty with China and Hong Kong.
Although, the SAR government insisted that the U.S. sanctions has no legal effect in Hong Kong.
Several years ago, when the United States sanctioned North Korea and Iran, Hong Kong was both guarding and avoiding the U.S., while warily sponsoring China’s allies.
At a time in 2020, the Hong Kong Monetary Authority (#HKMA) had issued a statement to financial institutions operating in Hong Kong, claiming that impact of the U.S. sanction is negligible. So is the Hong Kong Dollar no longer pegged to U.S. Dollar?
Suppose that the U.S. government will strictly enforce the sanction, and put an end to financial institutions providing services to the 11 individual being sanctioned, will the U.S. government also consider revoking the green-peg, or even withdrawing U.S. bonds from Hong Kong and China financial markets?
No one can predict where this financial warfare is leading to. But any reasonable Hongkonger should expect the Hong Kong and Central governments to turn these 11 people in to face the U.S. sanction. As Le Yucheng, China’s foreign vice-minister said in an interview, “we must stay focused without being swayed by any extreme forces, keep to the right direction of the bilateral relationship to prevent US-China relationship from spiraling out of control or getting derailed. This is also to avoid worsening of the hard-won trade deals.”
If any financial predator targets Hong Kong’s linked exchange rate system at this time, how much financial reserve does Hong Kong government have to defend the linked exchange rate? We must not forget that the government has been pouring out public money in enormous infrastructure projects like Hong Kong-Zhuhai-Macau bridge, the new runway in airport and Lantau Tomorrow Vision.
Besides, the Central government might need substantial amount of funds from the Hong Kong government to reactivate its trade relationship with the U.S..
One must note that, in China, countless farmlands have been wiped out in recent mass floodings as the #CCP called for food saving. Local authorities sprang into action with proposals targeting food wastage and food recycling, or “operation empty plate”, an initiative reactivated anew by Xi.
Hong Kong could possibly resume its role in supporting China as if during Cultural Revolution: endeavored to purchase American soybeans or Australian beef for the motherland, feeding hungry fellows.
Image: CNN
#FoodShortage #FoodSecurity #Flooding #China #CCPControl #Xi #ExtraditionTreaty