Hundreds of China-domiciled companies are listed in Hong Kong, including national leaders such as Tencent Holdings Ltd and CNOOC Ltd\
International News: Hong Kong’s ties with mainland China have never appeared more fragile, as protesters demand greater freedoms while Beijing expresses frustration at the turmoil. Amid rising tensions, there are concerns that Chinese authorities may take direct action to quell the unrest.
But the two economies have become so financially intertwined that officials have powerful incentives to preserve the status quo. The former British colony has been a key source of offshore funding for Chinese companies for more than two decades, and the inflow of cash and business from the world’s second-largest economy has greatly benefited the city.
Here’s a look at how much the two markets have come to rely on each other:
Hong Kong is the biggest offshore market for China’s state-run banks, which have about 7% of their total assets in the city. Bank of China Ltd, whose BOC Hong Kong Ltd unit is one of the city’s three note-issuing banks, derives about a fifth of operating income from Hong Kong and nearby Macau.
Chinese companies, especially cash-strapped property developers and local government financing vehicles, use Hong Kong to issue billions of dollars in debt, despite the higher borrowing costs demanded by international investors….Read More
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