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Hong Kong should brace itself for a “large” fallout from a British exit from the European Union, the city’s top official has warned, as local businesses line up to support a “remain” vote.
With polls showing the remain camp only slightly ahead, it is likely to be a close race in the final vote on Thursday.
Chief Executive Leung Chun-ying, who received his tertiary education in Bristol in southwest England, said the city would face consequences from a so-called Brexit given its international status.
“If Britain votes to leave the EU, it will impact the British economy and others around the world. As a highly open and internationalised small economy in a globalised market, the impact on Hong Kong will be relatively large, so our departments attach much importance to it,” Leung said.
Financial Secretary John Tsang Chun-wah warned two weeks ago that a Brexit vote might bring further risks for Hong Kong’s economy, after the city recorded its slowest first-quarter economic growth in four years.
He previously warned that the uncertainties associated with Britain’s national vote were “most concerning” and might trigger a long negotiation period on exiting trade agreements.
Local businesses are firmly in the “remain” camp, according to the British Chamber of Commerce in Hong Kong.
Executive Director Andrew Seaton said businesses had sent a “pretty clear signal that many are broadly in favour of staying”.
“Many of them have investments in Britain and businesses there,” he said.
British Chamber of Commerce Executive Director Andrew Seaton said Hong Kong businesses had sent a “pretty clear signal that many are broadly in favour of Britain staying” in the European Union. Photo: SCMP
Seaton, the British consul general to Hong Kong from 2008 to 2012, recounted concerns and conversations with local firms who had endorsed Britain as a “pretty user-friendly and flexible place to invest” and who relied on the country as a European headquarters for businesses.
“They would favour Britain staying because of the potential economic consequences they see: the instability and uncertainty,” he said.
Underscoring that warning, Hong Kong’s richest man Li Ka-shing told Bloomberg on Wednesday an exit would be “detrimental” to Britain and would have a “negative impact” on the rest of Europe.
Li had previously threatened to cut investment into Britain in the event of an exit vote. The country accounted for 37 per cent of global profits for Li’s CK Hutchison last year through retail, infrastructure and telecoms interests.
Views among members of the chamber were divided and reflected the divisions seen among British voters, according to Seaton.
The chamber itself has decided not to take a view either way.
About 600 British companies are currently operating in Hong Kong. Trade between the city and Britain reached HK$130 billion last year but the country only accounted for 1.5 per cent of goods exported from Hong Kong and 6.6 per cent of service exports, according to the latest government figures.
(SOUTH CHINA MORNING POST)
