Hong Kong has been crowned “a relic of an international financial center (IFC)” on Chinese social media and the city’s officials quickly stood up to refute the claims, stressing the resilience of the city’s economy.
The label references Hong Kong’s poor stock market performance. The Hang Seng Index, an indicator of the city’s stock performance, has plunged 36 percent within three years from about 25,400 in July 2020 to about 16,200 in December 2023, while the stock markets performance in other Asian cities, including Singapore, Taiwan, and Tokyo have seen substantial growth in the same period.
On December 6, 2023, the Hang Seng Index crossed its value in July 1997. Then, not only was HK returned to China, Premier Zhu fiercely defended Hong Kong in the Asian Financial Crisis. Hong Kong's gilded decades, as China's offshore financial center, were the world's envy and is… pic.twitter.com/lMmnHH5kIj
— Shirley Ze Yu (@shirleyzeyu) December 6, 2023
The phrase “a relic of an international financial center” emerged in September among mainland Chinese investors on Weibo. A senior staff member from the Agricultural Bank of China, for example, said on Weibo:
Hong Kong’s stock market has become very undesirable, in particular its Growth Enterprise Index. Who is responsible for the decline of the Hong Kong financial market? Not a single Chinese person wants to see Hong Kong decline, but its stock market and financial market are in de facto decline. If the stock continues to go down, Hong Kong will become a “Relic of Asia's Financial Center.” If that happens, the statement [made by former Chinese Premier Zhu Rongji] has come true: “If we ruin Hong Kong, we are the sinners.”
This phrase then went viral near the end of November as mainland Chinese social media users started to use the term to tag photos taken in the Central district of Hong Kong.
Some internet users also use AI image generators to illustrate Hong Kong's fall from a financial powerhouse to a “relic.” Below is one example created by X (formerly Twitter) user @abeleung:
— 鴨髀Aäpbei (@abeleung) November 20, 2023
The background of the above AI-generated image is a spoof on the Hong Kong government’s “Night Vibes campaign,” which aimed to boost tourism and consumption by turning the Victoria Harbor waterfront into a night market for street food and souvenirs.
The Hong Kong government is disgruntled by the label. Financial services chief Christopher Hui argued on December 1 on his blog that Hong Kong’s stock performance has had a slight recovery of 15 percent since the COVID-19 shutdown last year.
Global Times, China's state-owned media outlet, also stepped in to defend Hong Kong’s status:
Claims that hype Hong Kong’s image as “a ruin of global financial center” do not stand up to scrutiny. Despite some inhibitions in stock transactions and IPO short-term financing, the Special Administrative Region’s financial market has a solid foundation and is of great… pic.twitter.com/YYHvAXJN3t
— Global Times (@globaltimesnews) December 1, 2023
To stop the online mockeries, pro-establishment lawmaker Jimmy Ng suggested the government communicate with mainland Chinese social media platforms to block and censor posts that depict negative images of Hong Kong.
However, there is more bad news coming. On December 7, the international credit rating agency Moody's downgraded Hong Kong’s credit from stable to negative, pointing to the enactment of the National Security Law (NSL) in July 2020 and the overhauling of electoral rules for continuous erosion of the city's autonomy.
The city’s Chief Secretary, Eric Chan, rebuked the international credit agency’s rating as a “smear,” insisting that Hong Kong is better off with the NSL and its close ties with China. Moody's also downgraded China’s rating from stable to negative due to the country’s ongoing debt and property crisis.
Chief Sectary Eric Chan went on radio this morning to denounce Moody's downgrade:
• foreign ratings agencies smear HK
• NSL and improved electoral system prevents “Western thieves”
• 180k talent visa applications shows HK still an attractive market https://t.co/yMCKIfHyjw
— Aaron Busch (@tripperhead) December 7, 2023
After the lifting of pandemic restrictions in early 2023, the Hong Kong government expected a strong recovery for the city’s economy. However, the growth has been slow.
Professional talent has left the city en masse, the birth rate is at a record low, the government is caught between homeowners’ and potential homebuyers’ conflicting expectations in housing policies, and its fiscal deficit is currently at a record high.
The business sector started speaking out that the “Relic prophecy” might come true. In October, Frederick Ma, former secretary for financial services and the treasury, said the current economic crisis was worse than what had happened in 2003 when the city was hit by the SARS pandemic alongside the burst of property and Dot Com bubbles.
More recently, Shih Wing-ching, a most vocal voice of the city's property agencies, said if Hong Kong is unable to attract Western capital back to the city, the market would be ruined.
Some also said that the city's authorities are putting too much emphasis on national security and hence driving foreign capital away. But instead of acknowledging this, Chief Executive John Lee insisted that “external forces are still intervening in Hong Kong.”
In response to the city's economic downturn, he flagged public debate around the city's social and economic policies as “soft resistance,” a term which is used to describe any act that defies the authorities:
CE John Lee says claiming the Hong Kong government is overly focused on national security is “soft resistance.” Criticising economic and housing policies is also “soft resistance,” he says. https://t.co/02m756vBrq
— Timothy McLaughlin (@TMclaughlin3) December 6, 2023
The Hong Kong government is set to enact the city’s own set of national security laws in addition to Beijing's imposed 2020 NSL to crack down on “soft resistance” in 2024.