Markets in Hong Kong will benefit from China’s reopening, says HKEX Chairman Laura Cha, despite Beijing’s disappointing annual GDP growth figures last year.

The National Bureau of Statistics said on Tuesday that China’s GDP grew by 3% in 2022, slightly exceeding the forecast from a Reuters news agency poll yet under the official 5.5% target. Q4 year-on-year GDP growth stood at 2.9%. 

Not taking into account the initial onset of the pandemic, the full-year GDP figure out on Tuesday was one of the country’s weakest in nearly 50 years, as the zero-Covid measures hampered activity. 

The Hang Seng index in Hong Kong led stock market losses on Tuesday following the release of the figures. However, Cha said the reopening of the Chinese borders at the end of last year will lead to a robust rebound, CNBC reports.

“I think China, as the border opens up, the economy will grow back. There is a pent up demand there, there is a necessity, and, as China opens up and the economy continues to grow, recovering from the last two or three years, Hong Kong will definitely benefit from that as well,” Cha said at the World Economic Forum in Davos.

The HKEX Chairman added that over the past three years, capital inflows had been limited whilst the Chinese borders were closed, but the start of a “turning around” was witnessed in the second half of last year.

In addition, Cha said the value of IPO listings in the second half of 2022 was four times higher than in the first half of the year, and “the number of listed companies doubled that of the first half.

“We are seeing a turning around and as China – China just opened up not that long ago – but as it opens up, we would anticipate much more capital flow, therefore stimulating financial activities,” Cha continued.

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