Things still not looking up for HK and China, insists Roach

Economist Stephen Roach held firm to his gloomy view on Hong Kong and China on his first trip to the city after his sharp comments spurred rebuttals from former officials and what he said was a gag order during a Beijing conference.

The former Morgan Stanley Asia chairman offered a grim analysis of the outlook for the world's second-largest economy yesterday. He was also doubling down on a contentious debate on Hong Kong's future as a finance hub.

"I want to come back here and face the music," Roach said. . I've gotten a lot of pushback on these articles that I've written. People are upset about them, they're talking about them. So I am here to face the debate and exchange views."

Roach described seeing a giant "We Love Hong Kong" display on his old office building, part of a light show to draw tourists to a city that Roach said was "over" in a newspaper column in February.

He said he would debate prominent figures including real estate tycoon Ronnie Chan Chi-chung and take part in public discussions, as well as meeting corporate and former government leaders.

Roach's column triggered rebuttals from prominent figures, including Regina Ip Lau Suk-yee, convener of the Executive Council.

In a letter to the Financial Times, alternative investment firm PAG's executive chairman Weijian Shan argued it was premature to write off Hong Kong as it remains appealing as a free and open society with an independent judiciary and low taxes.

In response to criticism that his analysis discounts the city's history of bouncing back from political, public health and financial challenges, Roach stressed its economic prospects are tied to the mainland.

"There ain't gonna be any resilience here if China continues to underperform, period," he said, pointing to the parallel slowdown in growth rates for the city and country at large. "It's not something that I think you can necessarily count on to persist and project into the future."

Roach warned that a growing intolerance of debate in China could lead the country astray, exemplified by what he described as Beijing's attempt to silence him at a prominent event in the Chinese capital.

Roach said he was "muzzled" at the China Development Forum in March for the first time in a quarter century after being advised, "It's in your best interest, in our best interest if you don't speak."

In a previous blog post, he said "powers that be" warned him his remarks could be misinterpreted, without identifying who they were.

Roach told Bloomberg Television in a separate interview that he found a grim mood on the ground in Beijing especially among entrepreneurs and students when he visited.

"I found a Beijing that really didn't have much of the spark that I had been accustomed to over my many years of traveling there," Roach said.

"Certainly the best I could call it was a mood of grim resignation, and you could go further but I don't care to really do that."