LONDON: The erosion of Hong Kong’s “specialness” and its rapidly aging population could see its trend growth more than halve over the next decade and even plunge to zero in a “plausible” downside scenario, rating agency S&P Global estimated on Monday.
The firm said Hong Kong’s long-term economic prospects faced risks from the rapid deterioration in the US-China relationship, resulting in a decoupling of the US dollar and Chinese renminbi financial systems.
A second risk is an accelerated financial opening of mainland China that would lessen Hong Kong’s role as a conduit.
“Hong Kong’s specialness is being eroded,” S&P said in a new report. “A plausible downside scenario could see trend growth of zero in a decade,” it added, though its “baseline” estimate was for a more moderate a fall to just over 1% by 2030 from 2.7% in 2018. – July 20, 2020, Reuters
