Hong Kong leader Carrie Lam said that she will withdraw a controversial extradition bill that has sparked months of mass protests. The Hang Seng index rallied around 4%. The bill has been withdrawn after it really became clear that Hong Kong could lose its financial position in Asia to Singapore had Chinese troops intervened.
I have been in Asia for this crisis. Clients on both sides of the controversy were deeply concerned that capital was beginning to flee due to concerns over a troop invasion that could have a tremendous impact on the future stability of Hong Kong in the world financial system.
The bill’s withdrawal has been a major positive event for Hong Kong and the rest of Asia. The protest escalation was clearly impacting capital flows and was a major potential threat to the global stability of the economy we have been warning about over here.