The Japan Times - 'Law and order returned' Hong Kong's US-sanctioned leader tells bankers

The Asian business hub is hosting a week of high-profile events after years of political unrest and pandemic travel curbs tarnished the city's business-friendly reputation, sparked an exodus of talent and battered its economy.

The marquee event at the Four Seasons hotel was heralded by city leader John Lee as proof that the previously shuttered metropolis is back in business.

"We were, we are and we will remain one of the world's leading financial centres. And you can take that to the bank," Lee told delegates.

A former security chief who took office this year, Lee is among the Chinese officials sanctioned by Washington for cracking down on rights in Hong Kong after huge democracy protests. Blacklisted individuals are unable to hold accounts with the same banking giants attending the summit.

Most of the city's political opposition are either behind bars or have fled overseas since those protests.

"Social disturbance is clearly in the past and has given way to stability, to growing business and community confidence in Hong Kong's future," Lee said in his summit speech.

"Law and order has returned. The worst is behind us."

- US criticism -

Among those speaking at the summit were Goldman Sachs head David Solomon, Morgan Stanley CEO James Gorman, Blackrock president Rob Kapito and JP Morgan Chase counterpart Daniel Pinto.

But their presence is not without controversy.

Last week, the leaders of the bipartisan US Congressional-Executive Commission on China called on Wall Street executives not to attend, accusing them of "whitewashing human rights violations" and giving political cover to Lee.

The row illustrates the tightrope faced by multinationals in Hong Kong, which is both a lucrative business gateway for China and a flashpoint in increasingly tense relations between Beijing and Western powers.

In his speech Lee said the city has an "irreplaceable connection" to mainland China for global businesses "as the centre of economic gravity in the world shifts eastward".

The summit comes at a time of uncertainty over China's economy under President Xi Jinping.

Xi, who secured a norm-breaking third term last month, has overseen regulatory crackdowns clipping the wings of some major Chinese companies and is still sticking to a strict zero-Covid strategy.

- 'Don't read international media' -

Hong Kong's gross domestic product plunged 4.5 percent in the third quarter of this year while its stock exchange is among the world's worst performers, down more than 50 percent this year to levels last seen in 2009.

Lee's speech was followed by recorded interviews with three top officials involved in regulation, including Fang Xinghai, vice chairman of the China Securities Regulatory Commission, who criticised international press coverage of China.

"Don't read too much of international media," Fang said, sparking laughter from the audience.

During panel discussions senior Wall Street executives said there were growing signs inflation could be brought under control by central banks, but geopolitical risks and the end of the era of easy money would continue to inject volatility.

"My gut is the central banks will, in aggregate, tame inflation," Morgan Stanley chief Gorman told delegates, predicting interest rates of between 4-5 percent and inflation rates of around four percent over the coming years.

"There is a feeling that you know, the central banks will get this under control and then there will be there will be bright spots for investing," added UBS chairman Colm Kelleher.

Kelleher also backed Fang's criticism of Western media.

"We're not reading the American press, we all buy the (China) story," he said.

The bankers' summit is being held in a bubble that keeps delegates away from residents.

While Hong Kong scrapped mandatory quarantine in September -- a key demand of businesses -- it maintains layers of pandemic restrictions long since abandoned by almost everywhere else.

Overseas arrivals must undergo frequent testing and are unable to go to bars and restaurants for their first three days in the city.

Restrictions on various gatherings remain and masks are compulsory, including outdoors.

China is the last major economy committed to a zero-Covid strategy, persisting with snap lockdowns, mass testing and lengthy quarantines that has stamped out outbreaks but created growing economic pain.

T.Maeda--JT