East Asia's Financial Resilience Against Global Financial Crises Explored

East Asia's Financial Resilience in Light of Global Crises

East Asia, particularly Hong Kong, has learned valuable lessons from various global financial crises, including the Asian financial crisis, the global financial crisis of the 2000s, and the recent market turmoil during the onset of the COVID pandemic. Financial Secretary Paul Chan Mo-po highlighted these lessons during his keynote speech at the Bloomberg Global Regulatory Forum in New York.

Embracing Technology and Digital Assets

Chan emphasized that Hong Kong's financial system is reforming to accommodate the rise of digital finance. He stated, "Hong Kong is a small, fully open and externally oriented economy, making us prone to external shocks. Therefore, we must embrace technology and ensure the sustainable development of digital assets." Last year, authorities implemented a regulatory framework aimed to support responsible innovation in digital assets, establishing guidelines based on the principle of "same activity, same risks, same regulation." In September 2023, Hong Kong rose to 30th place in the Global Cryptocurrency Adoption Index, marking significant progress in East Asia's digital finance landscape.

Maintaining Monetary Stability

Chan also defended the importance of Hong Kong's currency peg to the US dollar, noting its critical role in sustaining monetary stability. With over US$420 billion in foreign exchange reserves, he reassured that the city is well-equipped to ensure liquidity during financial uncertainties.

Looking Ahead: Hong Kong's Financial Future

Furthermore, the finance minister discussed the transformative 2018 decision to allow biotech startups and innovative companies to list with weighted voting rights in Hong Kong. While facing challenges including social unrests, Chan believes that the city is ‘back again’ with a stable and promising financial outlook, paved by reforms and technological advancements.