Christian Whiton
Arecent Bloomberg article reported: “Hong Kong is turning to oil-rich Saudi Arabia for new funds to help offset a growing list of challenges facing its stock market.” That is quite an understatement for what was once one of the freest, cleanest financial capitals in the world.
The reality is grimmer than the story suggests. Hong Kong may soon climb the ignominious list of finance centers that depend on laundered funds as more legitimate capital flees to locales that have not shed the rule of law.
Saudi funds are the least of the city’s problems (and an unlikely salvation for the ailing city). More suspect are funds from places like Russia or elsewhere that legitimate bankers avoid. In April, Reuters reported that Hong Kong was among the transit points for Russian firms attempting to pay Chinese companies while evading Western sanctions related to the Ukraine War. Also mentioned were legal entities in Kyrgyzstan and Kazakhstan that are friendly to Russia and convenient for Russia-related business activities—not great company.
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