A former Monetary Authority chief has warned that growing political strains are blunting the city’s competitive edge as the global financial center for the world’s second-biggest economy, RTHK reported Monday.
In his forthcoming book “Prepare for Danger in Times of Peace”, former authority chief Joseph Yam Chi-kwong said mounting political tension in the former British colony has eroded Beijing’s confidence in the city and prompted the central government to cut its reliance on Hong Kong in global finance.
Yam said the establishment of the free trade zone in Shanghai and new yuan settlement centers overseas have “indirectly” reduced Hong Kong’s competitive advantage, and policymakers in Hong Kong face a real challenge to sharpen the city’s financial edge.
If policymakers don’t act, Hong Kong’s role as an intermediary will be marginalized once the mainland opens up to other parts of the world, he said.
Yam said the Hong Kong dollar will lose its significance in the long run, and Hong Kong people have to accept that reality.
“The mainland has a population of 1.3 billion, and it’s impossible for them to adopt a currency that is used by 7 million people in its global financial activities,” he said.
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