Protests that started in early June against a bill easing extraditions to the mainland have morphed into a broader stand against China’s rule over the financial hub. Demonstrators forced the city’s international airport to shut last week, and fears have grown that Chinese troops from the People’s Liberation Army may be deployed to restore order, a move that could risk an international backlash and irreparable harm to the city’s economy.
“Some clients are afraid of PLA intervention in Hong Kong, or of another closure of the airport, which will make it difficult to move their gold out of the city, as gold is shipped on commercial flights,” said Rotbart.
The city’s financial rivalry with Singapore is a feature of modern Asia but stretches back to their shared colonial past under British rule. Rotbart operates in both and also has an office in Manila. Rising violence in Hong Kong is likely to undermine investment there, according to Bloomberg Intelligence, with Singapore a probable beneficiary.
Capital flows – for example, into real estate – could divert to other Asian markets such as Singapore, while individual investors may shift wealth stored in Hong Kong’s insurance products to the city-state and elsewhere, BI said.
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Gold, typically a haven in times of geopolitical or financial stress, has become even more valuable in recent months. Prices topped US$1,500 ($2,077) an ounce earlier in August for the first time in six years as investors sought succor from Beijing’s trade war with Washington and a deteriorating global economy.
