Paul Chan warns of risks from geopolitical uncertainty

Financial Secretary Paul Chan said on Tuesday that geopolitical uncertainties have brought downside risks to the financial market and called for a prudent approach to tackle them. Speaking at a plenary session of the Asia-Pacific Economic Cooperation finance ministers’ meeting, he noted that while the global economy has shown resilience, its growth remains uneven and under strain. “Asia continues to outpace global growth, supported by technology-related trade and investment,” Chan said. “We see this momentum in Hong Kong, where merchandise exports rose by more than 40 percent in value in the first eight months of this year, and around 70 percent of our IPO proceeds were attributable to AI-related companies.” However, Chan noted, just concentrating on AI-related assets could lead to amplified market corrections across sectors and borders, while geopolitical disruptions would constrain fiscal space. “Managing these risks requires fiscal prudence, vigilant financial oversight and closer cooperation in information sharing, risk monitoring and emergency response.” Chan said sustained investment was crucial to translating technological advancement into productivity gains, wider AI adoption as well as green transition and other innovations. There should also be open channels for trade and investment to pave the way for productive uses of capital and cross-border technological adoption, he pointed out. Earlier at the...