Hong Kong must be louder on trade to fight off threat of Trump protectionism

Few economies depend as heavily as Hong Kong on a free and open multilateral trading system. Few have as much to lose if the current US administration succeeds in disembowelling the World Trade Organization and miring international trade in tariffs and other forms of protectionism.

Yet as the global trading system faces a protectionist assault, Hong Kong’s voice is nowhere to be heard. Our economy has a vested interest in pushing back against the chaotic trade protectionism that US President Donald Trump has unleashed on the world, and yet our government seems to be missing in action.

Some might argue that Hong Kong is just a tiny city economy with little power or influence when the world’s largest economies are locked in a massive trade conflict. But this is humbug. We are the world’s eighth largest exporter, just behind Italy and ahead of France. We are one of the world’s most trade-dependent economies and so have more at stake than almost any other economy.

Trade amounts to 359 per cent of Hong Kong’s gross domestic product, behind only Luxembourg (398 per cent) and San Marino (370 per cent). Mainland China and the United States may be the world’s largest exporters, but international trade is much less important overall to their economies (mainland China’s trade dependency is 34 per cent, while the US’ is 25 per cent).

Just as significant is Hong Kong’s world-leading role as an IPO hub. About 240 mainland Chinese companies are in the queue for initial public offerings, and most are targeting Hong Kong because it is a superconnector between them and global markets. The Hong Kong Exchange says US$14.1 billion was raised in IPOs in the first half of this year, by far the largest amount worldwide.

Some might also argue that as an (albeit special) city in China, we should defer to our national leaders in Beijing on a global trade battle. But I strongly disagree.

  

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