The economic reversal is in sight

It has been said that the Hong Kong economy is being crushed by three “big mountains” and there will be major adjustments in the future. It now appears that the pressure on the three mountains is increasing, the local economic outlook is going from bad to worse, and the asset market will face significant adjustment pressure.

The three mountains include the Sino-US trade war, the emerging market financial crisis and the acceleration of the normalization of interest rates in Hong Kong. First look at the Sino-US trade war. At one time, most of the market people smashed the trade war launched by the Trump administration, which was only a sham, and soon it would be close to accept an agreement acceptable to both parties. However, such an idea has been proved to be a wishful fantasy. The Trump administration’s trade war has not only failed to close the game, but has further intensified.

Emerging market crises spread across the globe

Previously, China and the United States had each imposed a 25% tariff on the $50 billion of exports from both sides. By the end of last week, the US media sent a message that Trump’s proposed tax bill of 200 billion yuan was being prepared, possibly this month. Implemented within. The 200 billion yuan plus the 50 billion that has been implemented means that nearly half of China’s exports to the United States will be subject to a 25% tariff. It is believed that it will spread to most industries and enterprises, making China’s overall exports more visible in the coming months. The downward trend.

Once the United States implements the new tariff list of 200 billion yuan, the Chinese government, which wants to face the position of a strong power, can not find a tax on 200 billion US imports to fight back, but it will certainly not “play war”, but will use other politics. Economic means to counterattack, if necessary, may not hesitate to sell US debt to shake the US financial market to show dissatisfaction, making the global economy more volatile.

Worst of all, the two governments, especially at the highest level, have adopted a negative attitude toward resolving trade wars. In the latter part of last month, the deputy ministerial meeting of the two sides was not successful, and even the most basic joint statement or the next round of meeting time was also owed. Many people would have expected the APEC Leaders Summit in November to create an opportunity for Xi Jinping and Trump to meet directly to resolve the crisis. Who knows that the US government announced a few days ago that Trump will not attend several summits held in the Asia-Pacific region in November, and will only attend Argentina to attend the G20 summit. The G20 summit has always been clearly defined. The developed countries and the BRICS countries have their own arms. The conference is not easy to have consensus. The leaders of the countries attending are often mixed. At most, they can only greet the bottom of the conference. The bilateral talks of time, let alone the conclusion of any major economic and trade or diplomatic agreements. Coupled with the resurgence of the North Korean nuclear issue between China and the United States, it is hoped that in the short term, another chance will be to completely reverse the trade war opportunity. And without the summit of the head of state to break the deadlock, the trade war is only endless.

Emerging market economic crises are also bad. The value of the Turkish lira has not really stabilized. The peso crisis in Argentina has suddenly deteriorated sharply. In just two weeks, the exchange rate has fallen sharply by 27%. The Argentine government has therefore requested the IMF to speed up the grant of standby credit to stabilize the market confidence and assist Argentina. Cash flow. The IMF has indicated that it will try its best to help Argentina to survive the crisis. However, Argentina’s inflation has worsened and it has become worse than Turkey. In the short term, it is difficult to get into the sky, and at any time there is panic because of poor government management. At that time, funds will accelerate from the flow of Argentina and other emerging markets, triggering a new round of financial turmoil, posing a major threat to global financial and economic stability.

Interest rate rises, Hong Kong’s economy slows down

The local economic tone of Hong Kong is also rapidly deteriorating. According to the HKMA data, new bank loans fell 4% year-on-year in July, the first decline in 21 months, and foreign trade financing fell by 5.2%. The data reflects that the trade war has had a bad influence on the financing needs of enterprises and import and export, and it also means that related corporate activities will slow down in the coming months. Now, the trade war continues to heat up, there is no sign of a solution, the foreign trade-related business, loan demand only shrinks further, and the overall economy is hard to be affected.

Another major blow is the growing trend of capital outflows from Hong Kong. After receiving the goods repeatedly in the near future, the balance of the banking system is only less than 80 billion yuan, which is much less than the 200 billion yuan at the beginning of the year. As the weakness of the Hong Kong dollar has not changed, the balance of the banking system will further decline, and the pressure for rising interest rates will further increase. The banking sector expects Hong Kong to raise the prime rate this month, and may even appear before the US raises interest rates. Once the prime rate rises, interest on various loans will rise from the floor to the credit card loan.

To know that the local household debt ratio is very high, there are also many small and medium-sized enterprises that use buildings as loan guarantees. The increase in interest rates means that the burden of repayment of households and small and medium-sized enterprises will increase, which will hit corporate investment and personal consumption expenditures. The overall economic slowdown will be exacerbated. In addition, the unattainable property market is inevitably adjusted after the interest rate hike and the economic crisis. The problem is only how deep and fast.

It can be said that in the next few months, from foreign trade to investment to consumption to the property market will be scaled down, how can Hong Kong’s economy and asset prices not be significantly reversed!