Yes, the Hong Kong of Old Is Over

Project Syndicate  |  Stephen S. Roach

Hong Kong has reclaimed its position as the global leader for initial public offerings, a development that pro-China advocates cite as clear evidence of the city's economic resilience. However, this apparent recovery increasingly depends on direct intervention by Chinese authorities, challenging the narrative of self-sustaining market strength. This ongoing debate traces back to a controversial opinion published nearly two and a half years ago by analyst Stephen S.

Roach, who argued that the territory's traditional autonomy and unique economic model had effectively ended. In response to that assertion, local boosters and political figures launched a determined promotional campaign designed to project stability and counter negative international perceptions. Despite these promotional efforts, the underlying reliance on mainland support indicates that the classic, highly independent version of the city has permanently changed, effectively operating as just another major Chinese urban center under Beijing's direct control.

Comment

The integration of the Hong Kong Stock Exchange into Beijing's state-directed financial apparatus marks the consolidation of a defensive economic shield designed to bypass Western capital restrictions. By substituting international institutional investors with mainland liquidity, the People's Bank of China has effectively insulated its primary offshore capital gateway from the punitive mechanisms of the US Hong Kong Autonomy Act of 2020. This structural trade-off sacrifices the territory's historical role as an independent global financial hub to secure a sanctions-resistant capital pipeline for state-owned enterprises like Sinopec and China Mobile.

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