We have seen that Hong Kong has been hit by one of the biggest protests in decades. The reason behind these protests was the controversial extradition bill that was brought by Hong Kong and backed by China. However, the Hong Kong leader announced that the bill will be withdrawn. But we must add that this does not mean the Hong Kong protests will be stopped as the protestors demand more from their government. Now, this also means that the business in Hong Kong would have implications as well.
We have seen reports that Hong Kong firms are even looking at Singapore as their next destination for relocating from Hong Kong due to the protests. Apart from that, there is a slowdown in the country as well because of the ongoing protests. Now, there is an exclusive report from Reuters which says that China has called on the biggest firms from the state to increase their investment in Hong Kong.
One of the biggest reasons, we believe, is in order to not let the protests make an impact on the economy of Hong Kong. The report also mentions that China wants the state firms to have “more control of companies in the financial hub”. The report adds that a meeting was held in Shenzhen where “senior representatives from nearly 100 of China’s largest state-run companies were urged to do their part to help cool China’s biggest political crisis in years”.
As per the report, Chinese SOEs were told to not just hold stakes in Hong Kong firms but also “look to control companies and have decision-making power in them”. Reuters reports a Chinese SOE saying that “The business elites in Hong Kong are certainly not doing enough. Most of them are just not one of us,” during the meeting. These state-owned enterprises included oil giant Sinopec and conglomerate China Merchants Group.
