The writer is a faculty member at Yale, formerly chair of Morgan Stanley Asia, and is the author of “Accidental Conflict: America, China, and the Clash of False Narratives” There is more to economic vitality than the stock market. But for Hong Kong, the market has always been emblematic of success. Imagine, a small city state with what had long been the world’s fourth largest exchange , a global leader of new stock offerings as recently as 2019.
Structural problems — especially the dreaded three Ds — debt, deflation and demography — have combined with the impact of the Covid pandemic as well as cyclical pressures in the property market and local government financing vehicles. These forces have sparked a three-year bear market that has taken China’s broad CSI 300 index down more than 40 per cent from its spring 2021 peak.