China influence can soften blow of Brexit
Updated: 2016-08-02 07:54
By Sophie He in Hong Kong(HK Edition)
David Dodwell (left), executive director of Hong Kong-APEC Trade Policy Study Group, believes that China is a stabilizing force for the global economy in the aftermath of Brexit.
The outcome of Brexit is expected to be catastrophic for Britain, and the price paid will be substantial for a very long time, David Dodwell, executive director of Hong Kong-APEC Trade Policy Study Group, told a roundtable forum on Friday in Hong Kong.
Dodwell told China Daily that it is not the phenomenon of Brexit that will worry investors, it is that Brexit is the product of a rather disturbing political and social development that is occurring across a large number of economies. If the malaise continues to get worse, it will hurt all of us, Dodwell warned.
Brexit is a setback for a lot of aspects of the British economy, Dodwell said.
He mentioned that the UK will have to face the substantial challenge of renegotiating trading agreements with other countries and regions; meanwhile, the situation will make it very difficult for labor to move around Europe. "People moving around is positive to the economy, as labor can match their skills against needs," he explained.
But Dodwell pointed out that China is a stabilizing force for the world, and he believes that the British government as well as British companies are hoping that despite the difficult situation they have created, still the buoyant companies from China can create jobs and help stabilize things in the UK.
"From a bilateral point of view, I see China beneficially impacting the UK to help them in a rather difficult situation. I don't see the UK has such powerful influence over China, since China is a much bigger economy."
He said that going forward, the best thing that the Chinese mainland can do is to continue to grow, focusing on stimulus economic growth. As a large economy like the Chinese mainland grows steadily, small and specialized economies like Hong Kong will continue to benefit from it.
Dodwell warned that it is irrational to talk about shutting the doors to the Chinese mainland due to the anxiety and depression that people have been feeling from economic setbacks, as a free flow of business can only be beneficial to Hong Kong people.
He suggested that there are some things that the central government can do to help Hong Kong, such as inclusion of more mainland cities into the Individual Visit Scheme.
Mainland residents who are not eligible to apply for the endorsement under the visiting program have to come to Hong Kong in groups, Dodwell said.
"Think about it, when tourists have to move in groups, they are very noticeable and will attract a lot of attention," he said, adding that if they come as couples or families they will be less noticeable and likely to spend more, which will help tourism and the retail industry in the city.