Foreign financial firms wooed to trade zones

Agencies and staff reporter

China will grant foreign financial institutions the same treatment as domestic ones in offering new types of financial services not yet available in the country in some free trade zones, the central bank said yesterday.

It will also facilitate the transfer of inbound and outbound funds related to foreign investments in regions such as Beijing, Shanghai, Guangdong province, Tianjin, Fujian province and Hainan province.

Analysts have expected the government to unleash more tools to combat the turmoil brought on by Trump's second term at the White House.

Hong Kong's pace of economic recovery may slow if the US imposes an additional 10 percent tariff on Chinese goods, said Billy Mak Sui-choi, associate professor of the Department of Accountancy, Economics and Finance at Hong Kong Baptist University.

Trump has proposed imposing tariffs on all trade partners, including Canada and Mexico, rather than specifically targeting China, but it will inevitably affect the competitiveness of Chinese goods, Mak said.

These extra duties will likely lead to higher prices in the US, driving up inflation and potentially reducing consumer spending, which could ultimately impact the US Federal Reserve's plans to cut interest rates and possibly delay or even halt cuts, he said.

Such a scenario will have a slight negative effect on Hong Kong's economy, Mak said.

Trump told his administration on day one of his new term to address unfair trade practices globally and investigate whether Beijing had complied with a deal he signed during his first stint in office, adopting what appears to be a slower approach with China.

China only reached about 58 percent of an import target in the deal during 2020 and 2021, Japanese investment bank Nomura calculated. The bank estimated that the country would need to purchase an additional US$223 billion (HK$1.74 trillion) worth of US imports to meet the agreement.