Amid economic downturn, Hong Kong is dubbed ‘a relic’ of an international financial center

Hong Kong cityscape highlights the International Finance Centre, Central District. Author: Mstyslav Chernov. Via Wikimedia Commons licensed under the Creative Commons Attribution-Share Alike 3.0 Unported.

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. 

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:

香港股市已经成为“鸡肋”,尤其是香港创业板指数!香港金融市场衰落是谁的责任!?没有一个中国人愿意看到香港衰落,但香港股市不行,金融市场不行,就是事实上的衰落!如果香港股市再跌,香港就会变成“亚洲金融中心遗址”。那样的话,真就像当年有人说的:“香港在我们手里搞坏了,我们就是罪人”。 ​

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.

A screenshot with the hashtag “a relic of IFC” from mainland Chinese social media platform “Xiaohongshu” via the Facebook page poorLhk

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: 

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:

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.

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:

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. 

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