The Brexit vote has concluded and the UK has chosen to leave. A local expert says Hong Kong has little to worry about, at least in the short term.
The United Kingdom has voted to leave the European Union. While talk of a potential “Brexit” has been on the lips of financial, business and news elites for months, the average Hongkonger may not have a clear idea of how the territory might be affected.
Timothy Peirson-Smith, Managing Director of the Hong Kong public affairs and communications consultancy Executive Counsel, has shared his take with Harbour Times.
Although Hong Kong companies with significant UK exposure might be affected, Peirson-Smith sees generally minimal immediate impacts, despite a rush of financial market activity, particularly in the currency and equity markets.
In contrast, he believes a greater negative impact might be felt in the long run from one of several potential sources:
- Potential disruption of Hong Kong’s growth prospects;
- Increased risk aversion in Hong Kong and globally;
- A weaker pound, leading to more tourists choosing UK over Hong Kong visits; and
- Secondary impacts from possible global or UK downturns.
According to the Trade and Investment and Census and Statistics Departments, Hong Kong’s trade with the UK was just 1.3 percent of total trade in 2015, putting the European country behind 11 other trading partners. As for investment, Hong Kong investors had HK$242 billion in assets sitting in the UK in 2014.