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Beijing believes that if it could make improvements on those metrics, the situation in Hong Kong would stabilize in a sustainable way. Barring dhina flare-up of prolonged and large-scale violence, Beijing is determined to stay the course, relying on the Hong Kong government, police, and business community to Need a china hong kong for a pressure on the demonstrators until the pro-democracy movement dies.

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Foreign Policy. Trending U. Robert Kagan.

Enjoy more high-quality articles like this one. Become a subscriber. Beijing has said it would not sit idly by if the unrest in Hong Kong threatened Chinese security and sovereignty.

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Chinese officials have said the events in Hong Kong were an internal matter and denounced foreign interference. But many world leaders have urged restraint.

Some U. That hinges on their assessment that Hong Kong is sufficiently independent from Beijing. Mainland Chinese financial institutions have expanded 3.

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The surge draws deep contrast to European banks, which have barely increased their exposure in Hong Kong, and the much slower pace of Japanese and American players. Since the introduction of the currency board inHong Kong has managed to keep the currency peg and stability amid political risks from time to jong.

In other words, while shocks to the economy are likely to come from mainland China, Hong Kong cannot count on any exchange rate or monetary policy due to its dependence and linkages to Chat yonkers new york more Fed. There Need a china hong kong for a no doubt that the current HKD regime has helped Hong Kong build a massive offshore financial center, but it does not offer any respite if a negative shock affects the economy, which is exactly where we are today.

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So what changed? InChina needed Hong Kong. China had not yet been allowed to join the World Trade Organization, so Chinese exporters had limited access to mong global market. In terms of total size and wealth, Hong Kong has also shrunk relative to China, which has experienced more than three decades of astoundingly high economic growth.