Hong Kong’s economy expanded at its slowest annual rate in roughly a decade due to a slowdown in investments and exports. Additionally, prop-erty prices have been rising at a slower rate and stock markets have been volatile in the midst of the US-China trade tensions. Q1 GDP growth stands at 0.5% compared to 1.2% for Q4 of 2018. Other Asian and emerging market economies have been experiencing a reduction in capital ex-penditure and marginal growth in private consumption.
Business sentiment in China has slowed since Q4 2018 but a recovery by the Q2 of 2019 is likely if the China/USA trade dispute is resolved quickly as is currently expected. Hong Kong’s economy is expected to grow between 2% and 3% compared to 3% in 2018. We expect that upon conclu-sion of the trade negotiations between the US and China, increased business confidence could enhance exports and investment in Hong Kong. We caution investors to expect significant stock market volatility in Hong King, China and other emerging markets if there is any hiccup in the trade discussions between the representatives from China and the USA.