HK economy regains momentum over past 20 years

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By CGTN’s Li Jiejun

Hong Kong was drawn into the Asian financial crisis 20 years ago, causing its stock and housing markets to collapse. The integration between the Hong Kong Special Administrative Region (SAR) and the Chinese mainland since then has been bolstered.

During the Asian financial crisis that started in Thailand in 1997, the Hang Seng index fell over 60 percent. The housing market dropped by more than 50 percent and unemployment rose to a record seven percent.

Views of Hong Kong's Residential Buildings. /VCG Photo

As an open economy, Hong Kong was easily dragged into the maelstrom. The city survived the crisis due to the SAR government’s intervention to protect the market.

“After the crisis, the SAR government has done a lot to improve its economic structure,” said Qu Hongbin, chief economist of Greater China, Hong Kong and Shanghai Banking Corporation (HSBC). “Meanwhile, other Asian countries involved also understand that they should be less reliant on foreign debt, but have higher foreign exchange reserves to protect them during times of turbulence.”

Street and shops at night, Hong Kong, China. /VCG Photo

Now 20 years on, Hong Kong remained an international financial center. It has also become the biggest renminbi (RMB) offshore center and the largest Initial Public Offerings (IPO) market in 2016.

Observers said Hong Kong should actively take part in the country’s development initiatives, which would be crucial to the region’s future status. With the Chinese mainland’s firm support, Hong Kong could become more confident, even if a similar financial crisis erupts.

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