Hong Kong Prepares for Financial Uncertainty Amid Global Tensions

Hong Kong's Financial Secretary, Paul Chan, has stated that while direct trade and investment between Hong Kong and Iran are limited, the ongoing conflict has introduced significant global uncertainty. According to RTHK, Chan mentioned in a television program that financial markets are expected to experience considerable volatility, with rapid shifts in capital flows. He noted that local funds might seek safe havens in Hong Kong, prompting the Special Administrative Region government to prepare and carefully manage financial risks, with contingency plans already in place. The conflict may also temporarily impact gold prices, oil prices, and international trade transportation costs, with authorities continuously assessing these risks. Additionally, the budget proposal includes a plan to allocate a total of HKD 150 billion from the Exchange Fund over two years to support the Northern Metropolis and other infrastructure projects. Chan highlighted that the Northern Metropolis covers a large area, accounting for one-third of Hong Kong's land, and includes residential units and commercial land, requiring substantial infrastructure investment. The Exchange Fund generates annual profits, allowing for a shift from financial investment to future-oriented investments. Chan anticipates that returns from the Northern Metropolis will become evident in approximately four to five years, emphasizing that financial returns should not be the sole focus. The Northern Metropolis is expected to foster future economic growth and serve as a vital residential area for citizens. He stressed that resources should not be concentrated solely on the Northern Metropolis, but also allocated to finance and trade sectors. Regarding support measures, commonly referred to as "sweeteners," Chan stated that three factors must be considered: necessity, the prevailing economic and social conditions, and public finances.