Tariff war risks threaten HK's 2pc growth forecast, warns economic advisor

The tariff escalation between the United States and China poses a significant risk to Hong Kong's projected economic growth of 2 percent for this year, said George Leung Siu-kay, the senior advisor in the chief executive's office at Hang Seng Bank.

Speaking on a radio program, Leung asserted that economic performance is unlikely to decline below the levels observed during the pandemic, given that the United States market constitutes only 6 percent of the business conducted by local enterprises.

He pointed out that the Hong Kong stock market may experience short-term fluctuations due to tariffs. However, listed companies in Hong Kong possess solid economic fundamentals, particularly strong growth potential among Chinese enterprises.

He also highlighted that the Hong Kong market remains attractive to international funds, emphasizing the unnecessary excessive pessimism in sentiment.

Meanwhile, Leung stressed the importance of Hong Kong remaining a free economic zone to boost foreign enterprise confidence and attract diverted capital during the instability of the US market.

He added that the banking industry will take into account corporate liquidity and repayment capabilities when assisting small and medium enterprises (SMEs) with financing and loans.

In addition, Lueng expressed hope that increased trade between Hong Kong and other markets could offset the decline in US orders.

Financial Secretary Paul Chan Mo-po announced in February's budget that the Hong Kong economy is forecast to grow by 2 to 3 percent in 2025.

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