In the early 1980s, the crisis of confidence in Hong Kong was mainly stalked by the “Hong Kong sovereignty return” issue
During the period, Hong Kong stocks suffered successive “shares” and the property market also fell significantly.
The Hong Kong dollar was smashed in 1983, which led to the implementation of the linked exchange rate system
The Chinese and British sides officially started negotiations on Hong Kong sovereignty in July 1983. Initially, the negotiations broke down. In mid-September of the same year, the exchange rate of the Hong Kong dollar plunged more than 20% in just one week. At the nine-point level, it fell to a historical low of 9.6%. The Hang Seng Index also plunged by 37% to a low of 690 points in the two months from the high of 1,102 points in late July.
The Hong Kong Government pushes the linked exchange rate to save the country
Until the Hong Kong Government announced on October 15 and officially implemented the linked exchange rate system on the 17th, the Hong Kong dollar was linked to the US dollar exchange rate, and the Hong Kong dollar became stable.
Property prices in Hong Kong also fell sharply during the period. According to the Rating and Valuation Department, the unit price index of private residential (all categories) fell by 17 points in the fourth quarter of 1983, compared with 24 points in August. Six points fell more than 30%.