19 October 2019

HK should mind capital flow amid QE3 tapering, official says

Hong Kong should beware of possible capital outflows after the United States announced it is tapering its quantitative easing program (QE3) starting this month, a Hong Kong official said.

“There is still uncertainty in the global economy, and one of them is the withdrawal of the QE3,” Secretary for Financial Services and the Treasury Chan Ka-keung told media on the sidelines of the Asian Financial Forum Monday. “Investors should remain cautious on the capital flow trend.”

Alan Bollard, executive director of Asia Pacific Economic Cooperation (APEC) Secretariat, expects there will be more service trade in the APEC region, particularly in the areas of accounting, financial, travel, data and logistics service trades. There will also be more trade between East Asia and Latin America, he said.

On the eurozone crisis, European Stability Mechanism managing director Klaus Regling said the region has basically “moved out of recession” after several member countries including Ireland, Portugal, Spain and Cyprus received 222 billion euros (US$36.7 billion) in financial support.

“The unemployment rate has stopped rising and industrial production is going up,” he said. However, he advised investors not to be overly optimistic on the recovery prospects of the region.

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