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External Publication

Hong Kong’s Intermediary Role on Funding the BRI: How does it fare against Singapore?

A look into the intermediary role of Hong Kong in financing cross-border Belt and Road Initiative projects and compare it with Singapore, a similar offshore financial center and competitor.

By: Alicia García-Herrero, Gary Ng and Hanrui LI Topic: Global Economics & Governance Date: November 4, 2020
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Opinion

Why are some stock markets in Asia less affected by coronavirus?

While Asian markets are in a sea of red, mainland China, New Zealand, Hong Kong and Taiwan are all defying the gravity.

By: Alicia García-Herrero, Gary Ng and Bruegel Topic: Global Economics & Governance Date: March 31, 2020
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Opinion

Why sentiment in Greater Bay Area is deteriorating, especially in Hong Kong

Lack of concrete plans affects sentiment after brief surge on announcement of Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area

By: Alicia García-Herrero, Gary Ng and Bruegel Topic: Global Economics & Governance Date: November 13, 2019
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Opinion

Upbeat outlook from Chinese banks' profits masks growing problems for small banks

The performance of Chinese banks has been resilient so far, despite decelerating growth. While the performance of large banks remained steady, the rebound came from small banks. Why have small banks rebounded and is the rebound sustainable?

By: Alicia García-Herrero, Gary Ng and Bruegel Topic: Global Economics & Governance Date: November 12, 2019
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Opinion

Southbound flows rescuing Hong Kong equity market

China seems to be coming to the rescue as social unrest affects the city’s financial market, but it’s probably only for arbitrage reasons

By: Alicia García-Herrero and Gary Ng Topic: Finance & Financial Regulation, Global Economics & Governance Date: October 2, 2019
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Opinion

China's dual banking system: consolidation as the final solution for weak small banks

There are fundamental solvency and liquidity issues for some small Chinese banks, widely influencing both the bond market as well as the broader financial sector. Given the difficulties in creating a level playing field between small and large banks, there is an expectation that small banks will continue to under-perform.

By: Alicia García-Herrero, Gary Ng and Bruegel Topic: Finance & Financial Regulation Date: September 16, 2019
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Blog Post

Hong Kong’s economy is still important to the Mainland, at least financially

Hong Kong’s current situation is important for the world in as far as its role as major offshore financial centre is key for China’s inbound and outbound investment and financing. Capital outflows from Hong Kong are especially risky given Hong Kong's so far useful but rigid monetary regime, namely a peg to the USD under a currency board

By: Alicia García-Herrero and Gary Ng Topic: Global Economics & Governance Date: August 19, 2019
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Opinion

What bond markets tell about China’s economy

Macro data doesn’t provide a comprehensive picture to investors, but bond issuance data can fill in some gaps.

By: Alicia García-Herrero and Gary Ng Topic: Global Economics & Governance Date: July 10, 2019
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Opinion

Sticks and carrots from China’s leadership to Chinese banks

The takeaway from the 13th National People's Congress (NPC) is clear: under the current economic downturn, Chinese authorities will do whatever it takes to support the real economy. Alicia García Herrero and Gary Ng reflect on the "sticks snd carrots" approach to Chinese banks.

By: Alicia García-Herrero, Gary Ng and Bruegel Topic: Global Economics & Governance Date: March 21, 2019
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Opinion

Goodbye deleveraging: Fiscal and monetary expansion to support growth in China

China has opted for a renewed fiscal and monetary stimulus to address the risk of the US-led trade war. The dual policies send a clear signal that economic growth is the priority, but such measures do not come without a cost. Deleveraging efforts will have to be put on hold for the time being.

By: Alicia García-Herrero, Gary Ng, Jianwei Xu and Bruegel Topic: Finance & Financial Regulation, Global Economics & Governance Date: August 23, 2018
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Opinion

China’s financial opening: Will it be different this time?

It is hard to judge whether China will indeed carry out a substantial opening of its financial sector, despite the significant external pressure it faces from countries such as the United States to liberalise its economy.

By: Alicia García-Herrero, Gary Ng and Bruegel Topic: Finance & Financial Regulation, Global Economics & Governance Date: May 9, 2018
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Opinion

China's “matryoshka” approach for debt-to-equity swaps could be good for banks, but bad for investors

The Chinese banking sector has enhanced its clean-up mechanism by introducing debt-to-equity swaps for the resolution of problem loans. While this allows banks to offload their stressed assets at a very low cost, it does not prevent banks’ exposure when we look closer at the so-called "state-owned funds" who are shareholders in the debt-to-equity swaps.

By: Alicia García-Herrero, Gary Ng and Bruegel Topic: Finance & Financial Regulation Date: March 8, 2018