Stephen Roach’s recent reassessment of Hong Kong as “more opportunity than threat” is not a sentimental pivot. It marks a recalibration of how macro actors—particularly institutional allocators—are interpreting geopolitical tension through the lens of financial geography. His February 2024 declaration that “Hong Kong is over” echoed familiar declinist sentiment. But this latest tone shift hints at a more nuanced institutional logic: in a bifurcating global system, neutrality and access—not autonomy—may become the more prized asset.
The underlying premise of Hong Kong’s supposed decline was never about GDP share or local sentiment. It was about functionality: could Hong Kong still serve as a credible offshore capital node for global markets amid political compression and East-West divergence? Roach’s original framing captured a common policy view—that post-2019 national security measures had eroded the “one country, two systems” hedge that global capital once depended on. But that lens may be too rigid in a world where capital increasingly flows through constraint-aware channels, not ideological purity.
Hong Kong’s capital role is less about being Western-facing, and more about being a convertibility bridge: a jurisdiction that still links renminbi liquidity, mainland equity exposure, and hard currency capital without overt fiscal weaponization. In that sense, US-China rivalry may be revalidating Hong Kong—not as a bastion of political independence—but as a convenient middle-tier capital membrane, especially as capital controls tighten elsewhere in the region.
This doesn’t nullify the risk factors Roach once flagged—mainland growth softness, demographic drag, or spillover from sovereign tension remain structural headwinds. But even amid these pressures, Hong Kong’s positioning within the regional macro-financial stack is shifting. Not toward irrelevance, but toward purpose-built neutrality—a premium asset class in a decoupling world.
This isn’t optimism. It’s realignment.
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