The Hang Seng Index saw its steepest decline in nearly three decades, plummeting 13.22 percent in response to President Trump's tariff announcements and China's retaliation. The sell-off is notable as it is reminiscent of the 1997 Asian financial crisis. Economists highlight that these tariffs represent unprecedented measures, significantly impacting investor sentiment. Analysts point to Hong Kong's market dynamics as a more accurate reflection of the situation, given its trading freedoms compared to mainland China's restricted environment.
"We're in uncharted territory. Previous retaliatory measures targeted less than 1 percent of China's total imports. The magnitude of the last measures is unprecedented."
"You cannot trade freely in China. You cannot short Chinese. You can do all of that in Hong Kong, which reflects what is going on much better than Chinese stocks."
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