US investment in Hong Kong may drop amid looming sanctions, finance chief says

Hong Kong’s finance minister has conceded that investment from the US could drop under the looming threat of sanctions, but maintained the city remained well-positioned to attract international talent and businesses. Financial Secretary Paul Chan Mo-po was speaking to the press during a Beijing-organised media tour to promote the Greater Bay Area, two weeks after he led a delegation to France and California to lure investment. Asked by the Post whether he was worried about the impact of possible fresh US sanctions on Hong Kong, Chan said: “Given this geopolitical tension, the capital market would be more volatile. Certain funds, say for example those from the US, may reduce their allocation to this part of the world. “But in our engagement with the investment sector in the United States, they are still very keen on the Greater Bay Area and the development of China, as they believe this is the growing future.” US foreign direct investment in Hong Kong stood at US$89.4 billion in 2022, a 3.3 per cent decrease from 2021. Chan was taking questions from local and mainland Chinese journalists who joined the “Opportunities in Hong Kong” media tour aimed at promoting the strengths of different cities in the bay area. The bay area is Beijing’s plan to integrate Hong Kong, Macau and nine cities in southern China into a hi-tech economic powerhouse intended to rival California’s Silicon Valley by 2035. The financial minister spent four days in San Francisco and Berkeley as part of the first joint delegation with Macau and Guangdong provincial officials to the US to promote the bay area. On Friday, the minister praised Hong Kong’s financial services and the city’s international connectivity. “Hong Kong as an international financial centre is a great platform for technological enterprises on the mainland when they have different fundraising needs,” Chan said. Secretary for Commerce and Economic Development Algernon Yau Ying-wah assured reporters at another briefing that foreign businesses held positive views of the city. “The commercial sectors in different countries are seeing Hong Kong positively,” Yau said. “If you ask [foreign] chambers here, they all see Hong Kong has a very good development prospect for investment.” The commerce minister added the city remained attractive to foreign investors, noting about 200 firms had settled in Hong Kong in the first quarter of this year. Yau revealed that the government’s Office for Attracting Strategic Enterprises, established in 2022, has helped roughly 50 companies in strategic industries to set up offices in the city, promising more than 13,000 jobs and a total investment of HK$40 billion. He said owing to tense geopolitical relations, overseas trade officers from the Economic and Trade Offices, the Trade Development Council and InvestHK had been tirelessly promoting the city abroad, and inviting investors to visit.