Is HK really over? City disputes US economist's controversial view

Govt says growth of China, HK improving, and investors have cast vote of confidence

- Magdalene Fung

HONG KONG - A war of words has ensued between the Hong Kong government and US economist Stephen Roach, after the former Morgan Stanley Asia chairman gave a speech on June 5 on his assessment of the city's future.

Mr Roach, now a senior research scholar at the Paul Tsai China Centre of Yale Law School, had in February created waves after he published an opinion piece in the Financial Times controversially headlined "It pains me to say Hong Kong is over".

On June 5, in a speech at the Foreign Correspondents' Club in Hong Kong a day after the 35th anniversary of China's Tiananmen crackdown, Mr Roach doubled down on his pronouncement of the Asian financial hub's certain demise.

Expanding on the premise of his piece, Mr Roach said that "without a rebound in the mainland Chinese economy, Hong Kong is unlikely to spring back to life on its own... because the linkages between the PRC (People's Republic of China) and Hong Kong economies have become tighter than ever".

"The Hong Kong economy has effectively been swallowed up by the mainland economy - hook, line and sinker," the economist said, touting data showing the trajectory of both economies' growth rates to support his argument.

"With the Chinese economy likely to underperform over the foreseeable future... I am afraid the same is likely to be the case for Hong Kong... For the Hong Kong economy, resilience without China will be all but impossible to achieve."