Many expected a more violent end to the protests in Hong Kong, but not financial expert Victor Shih, he tells in the Institutional Investor. He was not surprised by the cautious approach Beijing displayed in Hong Kong.
The Institutional Investor:
The cost of violent repression would be steep for China, says Victor Shih, associate professor of international relations at the University of California, San Diego, and an expert on China´s financial sector. Chinese companies have relied on Hong Kong as their primary offshore funding source, with nearly half of the 1,500 companies listed on the Hong Kong Stock Exchange based in China. Banks in Hong Kong have lent “hundreds of billions of dollars” to Chinese companies over the years, he adds. “Any violent resolution to the Hong Kong protests will cause the crashing of all these assets, resulting in major losses to the Chinese elite and state enterprises,” says Shih, who was born in Hong Kong. “I suspect this has a lot to do with the cautious approach that Beijing has taken so far.”
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