HONG KONG: Bankers and investors fear China's push to impose national security laws on Hong Kong threaten the city's future as an international financial centre. If it gets to that stage, Beijing's move will come at a cost for China's economy. WHY DOES CHINA NEED HONG KONG AS IT IS? China still has extensive capital controls and often intervenes in its financial markets and banking system. Hong Kong is one of the world's most open economies and one of the biggest channels for equity and debt financing. The size of Hong Kong's economy may only be the equivalent of 2.7% of mainland China's, down from 18.4% in 1997 when it reverted to Chinese rule, but the territory punches above its weight due to world-class financial and legal systems. As a gateway between China and the West, Hong Kong attracts global capital for China more efficiently than its other cities. HOW IS THAT CHANGING? Under the 'one country, two systems' formula agreed as part of Britain's handover of the territory … [Read more...] about How important is Hong Kong to China as a free finance hub?
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By Devashish Mitra In response to a crisis such as the current pandemic, which has thrown an estimated 122 mn Indians out of work, one expects GoI to come up with an effective rescue plan. However, the current crisis is different from anything seen before because Covid-19 prevents people from producing output — either directly by making them sick or indirectly through the lockdown in response to the pandemic. As reviving the economy is not possible without restarting production, there needs to be a phased exit from the lockdown through extensive testing that identifies people who can go back to work with the confidence that they won’t contract the disease from others. For these reasons, people like Amartya Lahiri and Urjit Patel have argued in favour of ‘ubiquitous testing’ in India, attaching an estimated non-trivial price tag of 2.5% of GDP, but, at the same time, expecting huge positive growth effects relative to the alternative of very little testing. … [Read more...] about View: India needs structural reforms for growth to make a strong comeback
But Beijing might not lose too much sleep over the loss. From the perspective of China’s leaders, keeping Hong Kong under their political thumb is more important. That is why Chief Executive Carrie Lam’s administration tried to brazen it out, tone deaf to overwhelming popular opinion. For Beijing, putting the extradition bill on the back burner is merely a tactical concession to contain the protests. … [Read more...] about Hong Kong’s battle for freedom is a little too late
“I feel differently now about that deal than I did three months ago,” Trump said during a May 19 cabinet meeting. “And we’ll see what all happens. But it’s been a very disappointing situation. Very disappointing thing happened with China because the plague flowed in. And that wasn’t supposed to happen, and it could have been stopped.” … [Read more...] about US Prez Donald Trump to rebuke China over Hong Kong friction, Covid-19