{"id":31224,"date":"2019-12-26T14:17:50","date_gmt":"2019-12-26T19:17:50","guid":{"rendered":"https:\/\/www.escapeartist.com\/?p=31224"},"modified":"2020-09-30T10:50:34","modified_gmt":"2020-09-30T15:50:34","slug":"the-impact-of-the-us-china-trade-war-on-hong-kong","status":"publish","type":"post","link":"https:\/\/www.escapeartist.com\/blog\/the-impact-the-us-china-trade-war-on-hong-kong\/","title":{"rendered":"The Impact of the US-China Trade War on Hong Kong"},"content":{"rendered":"

The Impact of the US-China Trade War on Hong Kong<\/strong><\/h2>\n

2019 wasn\u2019t great for global economics\u2014the US-China trade war and the anti-state protests in Hong Kong have set off a chain of events that introduced an unprecedented amount of economic uncertainty. As we move towards an <\/span>inevitable economic recession<\/span>, it\u2019s time that you consider jumping ship from the US economy and the economy in Hong Kong. With fluctuating gold markets and now the instability in the Far East, there\u2019s no other way that the tides can go really.<\/span><\/p>\n

Financial flexibility and mobility is essential for your survival when your investment destinations are behaving erratically. Considering the fact that financial markets behave according to the thoughts of the individual investor, the existing uncertainty points to greater turbulence in the market. It\u2019s only with the best financial services that you can move your money around with ease to protect your wealth. It\u2019s for this reason that I\u2019ve told my clients to start moving their money out of Hong Kong to <\/span>Caye International Bank<\/span><\/a> who\u2019re accepting applications from clients in Hong Kong. These guys are accepting minimum deposits of $1000 and will open your account remotely\u2014you don\u2019t even need to be there.<\/span><\/p>\n

Having said that, I\u2019m writing this article because things are getting out of hand and people need all the help they can get. Anyone still wondering whether they should leave Hong Kong markets needs to move out because the political unrest and the abysmal negotiations during the trade war don\u2019t bode well for investors across the world. To that end, I will discuss the US-China trade war with respect to its impact on Hong Kong and the financial implications of the dynamic.<\/span><\/p>\n

 <\/p>\n

Phase-1 Trade Deal With China<\/b><\/h2>\n

While the Trump administration celebrates the agreement on one of the first successful negotiations with Chinese officials to reduce tariffs, we don\u2019t really know what\u2019ll happen after. Analysts are saying that this is just a Christmas Truce that won\u2019t hold in a couple of months. There\u2019s plenty of reason for this uncertainty considering the discrepancy between US and China\u2019s <\/span>statements about the deal<\/span><\/a> and the less than impressive responses of stock markets after the agreement.<\/span><\/p>\n

Senior economists like <\/span>Paul Krugman<\/span><\/a> say that the agreement won\u2019t solve anything for the United States considering how the Chinese avoided tariffs worth $160 billion while agreeing to buy only $40 billion worth of agricultural goods. It\u2019s still a net deficit of $120 billion for the US economy. The Chinese on the other hand aren\u2019t too happy about the terms, with people saying that the Chinese government gave up too much to the US. Since Trump refuses to back away from his tariffs, the phase 2 deal still <\/span>looks like a pipe dream<\/span><\/a> because it\u2019ll require the Chinese to give up exactly what they need to expand their economy\u2014their economic influence. For all we know, these talks might break down once again and Trump\u2019s impeachment won\u2019t make things any easier.<\/span><\/p>\n

 <\/p>\n

Hong Kong Protests The Trade War<\/b><\/h2>\n

Hong Kong has traditionally served as the focal point for US investments intended for China and from China to the US. Chinese companies rely quite heavily on Hong Kong\u2019s financial markets to raise capital\u2014the continued protests and clashes between protesters and the LEAs in the city induced massive capital flight. This isn\u2019t helped by the fact that the trade war had already dealt intense blows to the economy.<\/span><\/p>\n

 <\/p>\n

Status Quo In Hong Kong<\/b><\/h2>\n

Back in March, the administration in Hong Kong and the Chinese signed an extradition agreement that was considered a violation of human rights. Since then, protesters have shaken Hong Kong to the core, which is finally beginning to show in its economic conditions. The city\u2019s economy is driven by expats working in its financial sectors and because of a thriving tourism sector.<\/span><\/p>\n

These protests have already forced an economic <\/span>shrinkage of 1.3%<\/span><\/a> to induce the first recession in a decade. Expats are <\/span>rethinking their decision<\/span><\/a> to stay in the city and tourism revenues have fallen. It\u2019s a mark of how badly tourism\u2019s affected that Cathay Pacific has announced a flight capacity cut as the number of people flying to Hong Kong <\/span>fell by 16.2%.<\/span><\/a>\u00a0<\/span><\/p>\n

The financial sector fairs no better as economic activity shifts to Macao in light of these protests. The Chinese gambling hub saw its shares rise as the government increased the <\/span>money transfer limit by 60%<\/span><\/a>. Clearly, the Chinese are trying to figure out a way to move their financial activities to another center as they lose control over Hong Kong.\u00a0<\/span><\/p>\n

In light of the US government <\/span>signing a Human Rights Act<\/span><\/a> expressing moral support for protesters in Hong Kong, the negotiations are expected to hit a wall as well. The Chinese have expressly told the US military to <\/span>stay out Hong Kong<\/span><\/a>, showing that tensions are running high between the two superpowers which could have greater economic consequences.<\/span><\/p>\n

 <\/p>\n

The Impact Of The Trade War<\/b><\/h2>\n

At the beginning of the trade war, nearly <\/span>17% of all Chinese exports<\/span><\/a> to the US passed through Hong Kong. Hong Kong sees itself losing out on revenues owing to this trade war as these tariffs show no sign of being abolished. Combine this trade loss with the political unrest in the city\u2014I don\u2019t really see how any of these things might stop.<\/span><\/p>\n

 <\/p>\n

What Is An Investor To Do?<\/b><\/h2>\n

Smart investors always keep in mind the flow of geopolitical currents (this is my favourite paid newsletter dealing with Geopolitics – click here<\/a><\/strong>) when making their investments. Let\u2019s start with the situation in Hong Kong<\/a>\u2014the political instability isn\u2019t going to resolve itself any time soon. Assuming the city keeps losing money, you\u2019ll need to move your money out as soon as possible.<\/span><\/p>\n

Let\u2019s take a broader view now\u2014if the trade war continues and Hong Kong crashes, then we\u2019re in for a recession. In that moment you\u2019ll need to start moving your money into commodities because financial markets will succumb to the pressures of a global economic recession.<\/span><\/p>\n

 <\/p>\n

Conclusion<\/strong><\/h2>\n

In either of the two situations, you\u2019ll need to find a bank that extends the greatest possible range of mobility options. That\u2019s Caye International Bank<\/a>\u2014additionally, you\u2019ll need a money transfer service that doesn\u2019t charge an arm and a leg. You should consider working with Moneycorp<\/a> for your transfer needs. With these two services, you\u2019ll be golden in the event of any economic instability or collapse.<\/strong><\/p>\n

I do hope you enjoyed reading: The Impact of the US-China Trade War on Hong Kong.<\/strong><\/p>\n

Here is<\/b> probably the most extensive ebook on <\/b>Everything You Ever Wanted To Know About Eliminating Your Taxes, Protecting Your Assets And Regaining Privacy Over Your Life And Investments<\/i><\/b>. It is called<\/b> The<\/b> Ultimate Guide To Going Offshore<\/b><\/a>. <\/b><\/p>\n

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The Impact of the US-China Trade War on Hong Kong 2019 wasn\u2019t great for global economics\u2014the US-China trade war and the anti-state protests in Hong Kong have set off a chain of events that introduced an unprecedented amount of economic uncertainty. As we move towards an inevitable economic recession, it\u2019s time that you consider jumping […]<\/p>\n","protected":false},"author":678,"featured_media":31426,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","om_disable_all_campaigns":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[9410,9409],"tags":[29,258,16803],"yst_prominent_words":[4183,1805,2120,1918,3320,2373,3324,10124,3369,3365,11088,11085,3353],"acf":[],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"https:\/\/www.escapeartist.com\/wp-content\/uploads\/2019\/12\/hong-kong-2438633_1280.jpg","_links":{"self":[{"href":"https:\/\/www.escapeartist.com\/wp-json\/wp\/v2\/posts\/31224"}],"collection":[{"href":"https:\/\/www.escapeartist.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.escapeartist.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.escapeartist.com\/wp-json\/wp\/v2\/users\/678"}],"replies":[{"embeddable":true,"href":"https:\/\/www.escapeartist.com\/wp-json\/wp\/v2\/comments?post=31224"}],"version-history":[{"count":19,"href":"https:\/\/www.escapeartist.com\/wp-json\/wp\/v2\/posts\/31224\/revisions"}],"predecessor-version":[{"id":42424,"href":"https:\/\/www.escapeartist.com\/wp-json\/wp\/v2\/posts\/31224\/revisions\/42424"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.escapeartist.com\/wp-json\/wp\/v2\/media\/31426"}],"wp:attachment":[{"href":"https:\/\/www.escapeartist.com\/wp-json\/wp\/v2\/media?parent=31224"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.escapeartist.com\/wp-json\/wp\/v2\/categories?post=31224"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.escapeartist.com\/wp-json\/wp\/v2\/tags?post=31224"},{"taxonomy":"yst_prominent_words","embeddable":true,"href":"https:\/\/www.escapeartist.com\/wp-json\/wp\/v2\/yst_prominent_words?post=31224"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}