Hong Kong exports to mainland China. When China's economy is doing well, Hong Kong's exports will also increase, so the economy will be doing well. Hong Kong has been growing economically with China, which has achieved rapid economic growth since the beginning of the 21st century, but recently the economy of China is coming down.
In the future, if the economy of China falls backwards, Hong Kong's economy may also slow down. This will have a deep connection to the many of the companies that make up Hang Seng 50 which are Chinese enterprises. The economic stability in Mainland China is a powerful backbone for Hong Kong's economy.
Progress in the four major fields
Hong Kong clearly states that it will develop about four areas of artificial intelligence, bioscience technology, smart city, financial science and technology. Though these technologies require the world's most advanced technology, the Hong Kong Exchanges are ranked third in 2017 in terms of the amount of resources purchased at the financial center, which has advantages in terms of money.
The progress of the four major fields is a field that developed countries are already aware of, but there is the possibility of achieving growth that cannot be defeated by developed countries, thanks to pipes cultivated over the years as a front door for China. If they can show their presence in the four major sectors, it will be a model for other countries and expectation for future economic growth will be stable.
Expanding domestic demand
Currently, Hong Kong’s domestic demand is expanding. The reason is that the number of people traveling from the world to Hong Kong is increasing, and the income of residents is increasing due to the economy being favorable. The fact that employment is increasing due to expansion of industry also boosts economic activity. Expansion of domestic demand is an important element in considering the future economy of Hong Kong as it has characteristics that it is hard to be affected by the world economy.
Since the Hong Kong dollar and US dollar are considered pegged, there are strengths to be able to raise funds at low interest rates in Hong Kong. If interest rate hikes are made in the US in the future, there will be a movement to repurchase the money that was flowing in Hong Kong, and if the purchase of US Treasuries comes, the outflow of funds will accelerate and the risk of Hong Kong's market will be stagnant. The economic recovery in the United States may be a negative material for the Hong Kong market.