This article discusses the possibility of
Hong Kong being the epicenter of the next financial crisis. This claim
is justified by comparing the relationship between China and Hong
Kong before and after the 2008 crisis. With China being the second larger
economy in the world, i think this should be a major concern.
Hong Kong’s financial
supervisor is widely seen as one of the world’s best macro prudential
regulators but Innes-Ker questions whether even the super-savvy Hong Kong
Monetary Authority can save the territory from the crisis that could be
unleashed if China’s credit bubble were to burst in an uncontrollable fashion.
Duncan Innes-Ker, an
Asia analyst at the Economist Intelligence Unit, has followed Hong Kong’s ups
and downs for several years and says the present boom is the natural
consequence of the West’s - particularly the American - response to the crisis.
“When you get low US
interest rates you get a property bubble in Hong Kong. To my mind, this looks
like the latest in a cycle of boom and busts,” he says.
Some people seem to be very skeptical of
this possibility. What's your take on this? Do you think a b bust
is imminent? If so, how widespread do you think the effect will
be?(will it be similar to the 2008 crisis?), Is it something the rest of
the world should worry about or do you think China has it under control?
This situation is something I am going to watch closely in the next several years. It would be interesting to see whether Beijing allows Hong Kong to operate as a semi-autonomous region and allow it to maintain its own economic and political system or take complete control of governance in Hong Kong and establish policies of a mixed economy and limited political rights.
ReplyDeleteIt sounds interesting though at the moment I'm not sure if such a crisis would happen from the data that is present. I would be interested to see what happens in several years.
ReplyDelete