Hong Kong has long occupied an enviable perch as a bridge between markets in China and the West. But amid flaring tensions between Washington and Beijing, and controversy over a repressive new security law, many are asking whether the territory can keep its privileged position.
Laura Cha, chair of the Hong Kong stock exchange consortium HKEX, believes that it can. In an interview during Fortune‘s Most Powerful Women Summit, Cha acknowledged that current events have created a “difficult situation” but predicted that Hong Kong will will remain a pre-eminent destination for investors.
“People have questions about all the events that have taken place and like everyone else we are trying to weather it and go through it as well as we can,” Cha told Fortune‘s Claire Zillman.
Her comment came in response to a question from Zillman about whether trade tensions and Hong Kong’s new security law—which allows Beijing’s government to smother civil liberties—will cause investors to flee.
Cha added that Hong Kong remains an “excellent connector” between East and West, and said the territory’s stock markets are “stable and steady.” She also noted that Hong Kong has been the top destination for initial public offerings in seven of the last 11 years.
Cha’s fluid, diplomatic answers are unsurprising given her decades of experience as a senior executive with ties to China’s central government, and her role as a board member of major European companies including Unilever. Her optimistic assessment is belied, however, by recent reports of investors and multinational companies decamping for Singapore, and of wealthy individuals moving gold out of Hong Kong.
Cha also addressed the recent boom in secondary listings on Hong Kong. She acknowledged that this phenomenon has been driven in part by companies using those listings as an insurance policy against future TikTok-style clashes between the U.S. and China. But she also said the popularity of Hong Kong listings reflect HKEX’s reputation for clear and fair rules.
As for the possibility of a new U.S. administration led by Joe Biden next year, Cha maintained her diplomatic tone, saying “Issuers will choose the market that makes most sense for them.”