Hong Kong is seeking to defend its economy in the face of a slowdown in China, which is casting a shadow over the Asian financial hub.
Bloomberg indicated that after strong exports contributed to supporting the city’s growth during the first half of the year, officials in Hong Kong are preparing to face the challenges resulting from the slowdown in China.
As part of the efforts made to support the real estate sector and boost spending approved by China, the city’s CEO, John Li, announced the easing of mortgage rules and the reduction of the alcohol tax, with the aim of stimulating the local economy.
At the same time, shares of Chinese real estate companies witnessed a rise ahead of the press conference scheduled to be held by the Chinese Minister of Housing on Thursday, amid speculation that new support measures could be announced.
However, investors appear to have lost patience with the pace of Chinese stimulus, as the Chinese stock index fell by about 10% from its recent high.
As part of its efforts to save its economy from the Chinese slowdown, Hong Kong is following several strategies, the most prominent of which are:
- Diversify trading partners by strengthening its trade relationship with countries in Southeast Asia, the Middle East and Europe.
- Promoting innovation and technology: The government strongly supports the development of financial technology and innovation in various sectors such as artificial intelligence and the digital environment, to become a global financial and technology center.
- Stimulating the local economy: The government is seeking to increase investments in infrastructure and boost tourism as part of plans to stimulate the local economy.
- Attracting foreign capital by providing a stable, low-tax regulatory environment, which attracts foreign investors, especially in the fields of finance and real estate.
These steps aim to ensure sustainable growth for the local economy and reduce vulnerability to the economic slowdown in China.
Chinese demand slows
The impact of the economic slowdown in China was not limited to Hong Kong only, but extended to other markets. LVMH luxury shares declined after sales of fashion and leather products declined in China for the first time since the Corona pandemic, which reflects weak demand from Chinese consumers. Who were known for their great appetite for luxury goods.
Investors in shares of electronic chip companies also face new challenges after weak expectations from ASML cast a shadow over the technology sector globally, leading to losses estimated at more than $420 billion in the market value of the index, which includes the largest chip manufacturing companies in the world. United States and Asia.
