Concerns over unilateralism and policy uncertainties in the United States are driving international funds to diversify rapidly, boosting their allocations in the Chinese mainland and Hong Kong markets, Hong Kong Financial Secretary Paul Chan Mo-po said in his weekly blog on Sunday.

“Many friends in the financial markets have said that global capital has been accelerating placements in the Chinese mainland and Hong Kong markets in the past few months and the proportion of foreign investment subscriptions for some Chinese mainland companies that recently listed in Hong Kong has increased significantly over the past two years,” Chan said.

He also said that some foreign financial institutions are expanding their scale of operations and hiring in Hong Kong, while others are transferring senior staff to the city.

The finance chief concluded two trends from these facts. “On one hand, the resilience of the Chinese economy, breakthroughs in innovative technologies, and the continuous deepening of a high-level opening-up policy have led foreign investors to fear missing out on investment opportunities in the Chinese mainland,” he said.

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“On the other hand, the unilateralism and policy uncertainty of the US government have prompted international funds to accelerate risk diversification and increase their allocations in the Chinese mainland and Hong Kong markets.”

Chan said the US’ so-called “reciprocal tariffs” have not only seriously disrupted the global trade order and supply chain stability, but have also significantly increased uncertainty in the international trade and investment environment.

“Judging from the reaction of countries around the world, the tariff war provoked by the US is not only hurting its own economy but is also pushing itself into isolation,” Chan said.

He added that he had heard a clear message from global business leaders during his recent exchanges with them, unanimously criticizing the current actions of the US authorities, while emphasizing that in today's geopolitically turbulent environment, a market that is transparent, open, politically stable, and welcoming to cooperation is fertile ground for global enterprises to expand their operations.

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“As a highly export-oriented economy, Hong Kong cannot remain immune. As a result, we have to realize that the global international economic and trade landscape will have structural changes in the medium and long term,” Chan said.

To meet these challenges, he said Hong Kong must maintain a safe and stable business environment for global capital, and showcase its unique status and advantages under the "one country, two systems" principle.

Chan said that many business insiders have expressed recognition of Hong Kong’s consistent policy on free trade, which is critical for business development under the shadow of the trade war.

He says he believes Hong Kong will embrace new opportunities as many companies are adjusting their business strategies to focus on areas such as linking up Chinese mainland markets with the US and Europe, and exploring trade between the mainland and the emerging markets in Asia.

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Business leaders are particularly optimistic about the Association of Southeast Asian Nations, a region with a large and young population, a rapidly growing middle class and an expanding consumer market, he said.

“As a free port, Hong Kong can facilitate these enterprises to realize their plans to tap new markets through flexible logistics distribution and cargo warehousing,” Chan said.

He added that Hong Kong can also play a professional role in supply chain management, trade financing, and environmental and social governance consulting.

Contact the author at thor_wu@chinadailyhk.com