A crackdown in Hong Kong can bring financial risks for China

Apart from the issue of political and civil rights in Hong Kong, for China, there is the issue, as important as finance and the possible effects of a repressive police-type. The special region is the major financial center of China, a large part of the economy of Beijing, which integrates seamlessly with the large capacity of the country. The ability to attract foreign investment from Hong Kong is a key issue for the economic system in Beijing, thanks to the freedom of movement of capital that integrates with operations in the Chinese currency. After Tokyo, the Hong Kong Stock Exchange is the second of the Asian continent and the sixth in the world, with these data we can understand how political events are viewed with fear by global investors, who fear a backlash significant indices. For the contraction index in Hong Kong was, on the whole, content, having had a reduction of 1.9%, very little response in the face of protests that shook the former British colony, events that could have an impact heavier than in other areas of the planet. However, fears of a more decisive Beijing agitate stock traders, who feed on the actual fear of a general questioning of the status of free zone, enjoyed by Hong Kong, from which it could derive a financial contagion able to put difficulties in the second world economy. On this basis, the repressive action of China could be attenuated more by the fear of an economic and financial crisis, which for reasons of political expediency. The fact remains that an overview of where the former British colony was subjected to harsh repression, of the kind that Beijing routinely uses to quell the unrest, put in crisis the status enjoyed by Hong Kong, resulting in a real escape financial institutions present, forced by the changed political conditions to change their operational headquarters. According to analysts, the direction would be to go to Singapore, lost to recreate the conditions in Hong Kong. This possibility could also compress the large domestic market share that the former British colony of Chinese goods absorbs 11%. This is a considerable amount for a nation struggling with the perennial problem of increasing the domestic market, now considered an essential part of the country's gross domestic product. In addition, the close link from the financial point of view between Hong Kong and China may decline to the great credit of the former colony that financial institutions have engaged in public enterprises in Beijing; is a matter too important not to be considered in the evaluation of the Chinese Communist Party in the manner and within the time on how to deal with the problem of political freedom in Hong Kong. If the reaction will be pragmatic, that is, you'll want to keep a soft attitude with the demands of the demonstrators, will be saved from possible bankruptcy state industries and will be able to maintain a leading role in global finance, but this will mean an expansion of political demands in the country conversely, a normalization on the theme of political pluralism, much disliked by the Chinese nomenclature, will not have a very high price, even for a nation that can have a big liquidity such as China.