Hong Kong bankers advised not to gamble against China

• Hong Kong’s first major conference since lifting COVID-19 quarantine restrictions brought together 200 global financial executives.
• It was to discuss global risks and sustainable finance.
• Fang Xinghai advised attendees not to bet against China and Hong Kong.

At a high-profile investment meeting, Hong Kong’s leader touted Hong Kong’s unique relationship to China’s real estate downturn and slowing economic development, while Chinese regulators dismissed these issues.

Hong Kong’s first major conference since lifting COVID-19 quarantine restrictions brought together 200 global financial executives on Wednesday to discuss global risks and sustainable finance.

Fang Xinghai, vice chairman of the China Securities Regulatory Commission, advised attendees not to “bet against” China and Hong Kong and to visit China to understand what is occurring.

He stated international media “don’t really grasp China very well” and have a “short-term focus,” bringing laughs and applause.

Fang and other Chinese officials addressed the conference in pre-recorded interviews due to quarantine restrictions.

Yi Gang, China’s central bank governor, claimed that inflation is around 3 percent, compared to 8 percent or more in many Western economies, and that economic and reform programs will continue. After a Communist Party meeting last month gave leader Xi Jinping an

unprecedented third five-year term and barred important reformers from the ruling party leadership, such comments sought to allay concerns.

“China has a tremendously huge market as there is still much opportunity for urbanization and the demand of middle class consumers is still on the rise,” said Yi.

China’s economy grew 3.9 percent in the past quarter, significantly below the stated objective of more than 5 percent, and the key real estate industry has languished as regulators have sought to curb debt rising to unsustainable levels.

The vice chairman of the China Banking and Insurance Regulatory Commission, Xiao Yuanqi, assured conference attendees that property loans account for 26% of banks’ overall lending and 90% are “high quality.”

The Hang Seng Index rose 2.6 percent and the Shanghai Composite Index 1.7 percent on Wednesday.

Morgan Stanley CEO James Gorman, Goldman Sachs CEO David Solomon, and Citigroup and Blackstone executives will speak at the Hong Kong conference.

It highlights the ex-British colony’s attractive and competitive financial hub.

Hong Kong Chief Executive John Lee opened the event by calling the city the “only place in the world where the global advantage and the China advantage come together.”

“This unique confluence makes Hong Kong the essential connector between the mainland and the rest of the world as the center of economic gravity swings eastward,” he said.

China took over Hong Kong in 1997 with the promise of 50 years of legal and economic autonomy. Beijing has been gaining power. After 2019 rallies demanding a more democratic system of leadership, a security law was passed to stifle dissent.

The pandemic’s economic impact has been exacerbated by rigorous quarantine and a tourism slump.

Lee stated Hong Kong’s worst is over. Former security head he told the conference “law and order has returned” and social disturbances were over.

The long-planned meeting went forward despite tropical storm warnings that closed schools.

As tropical storm Nalgae approached, the Hong Kong Observatory said that it will increase its T8 signal in the afternoon, shutting down the city and stock market.

Hong Kong relaxed COVID-19 requirements to allow financial conference attendees to eat at certain places. Most inbound tourists can’t do so for three days.

Instead of being quarantined in Hong Kong for seven days, COVID-19-positive attendees can leave on chartered planes.

Given economic and human rights issues with China, some US senators have advised American corporations to skip the summit. The US has condemned Hong Kong’s crackdown on opposition after the National Security Law.

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