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In this issue of the Global Impact newsletter, we look back at the events that shaped 2023, and looks forward to what we can expect in mainland China, Hong Kong and the rest of the world in 2024. Photo: Xinhua

Economy China Economy

Global Impact: time to reflect on 2023 for mainland China, Hong Kong and the rest of the world, and look ahead to 2024

Global Impact is a weekly curated newsletter featuring a news topic originating in China with a significant macro impact for our newsreaders around the world
In this issue, we look back at the events that shaped 2023, and looks forward to what we can expect in mainland China, Hong Kong and the rest of the world in 2024

Year in Review

Eugene Tang

Published: 2:00pm, 2 Jan 2024

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Global Impact is a weekly curated newsletter featuring a news topic originating in China with a significant macro impact for our newsreaders around the world. Sign up now!

The world in 2023 was more challenging, costlier and hotter than before.

There were several major conflagrations: Russia was still embroiled in Ukraine nearly two years after invading its neighbour. Israel’s military operations claimed an estimated 20,000 lives as of December 22 in Gaza, 11 weeks after Hamas terrorists killed and kidnapped hundreds in an Israeli kibbutz. In recent weeks, Yemen’s Houthi fighters have attacked ships sailing through the Red Sea on their way to Europe via the Suez Canal.

The global “climate breakdown” has begun, said the secretary general of the United Nations, as the summer of 2023 was the hottest in human history. That extreme weather underscored the importance of the landmark deal in Dubai, where participants at the Cop28 climate conference agreed to shift energy systems away from fossil fuels, even if critics said the pact was watered down and non-binding. All eyes will be on the Cop29 climate conference, scheduled for November 2024 in Azerbaijan.

The cost of money rose all over the world, as global central banks raised interest rates to halt inflation, which accelerated to 6.6 per cent in 2023, according to the International Monetary Fund.

09:04

A look back at the key moments in China in 2023

Huawei Technologies surprised the world with its 5G-capable Mate 60 smartphone using an advanced chip that it stealthily developed to bypass US sanctions. More “disruptive” products are promised in 2024, said executive Richard Yu.

Chinese technology companies were in a frenzy over large language models, with 238 artificial intelligence models – including Baidu’s Ernie – launched as of October, according to the internet search engine’s CEO Robin Li.

The world also lost some major iconic figures, notably Henry Kissinger in diplomacy, Charlie Munger in business and Coco Lee in Hong Kong.

Now, what can Hong Kong, mainland China and the world expect in 2024?

03:12

Xi Jinping, Joe Biden hold talks on sidelines of Apec summit to ease strained US-China ties

In mainland China …

For mainland China, the top priority is to restart the nation’s economic growth engine, after an expected barnstorming post-Covid recovery gave way to a sputter, as optimism and consumption buckled in 2023 under the weight of rising joblessness and an ongoing property crisis.

All eyes will be on China’s legislative meetings, known as the “two sessions”, where Premier Li Qiang is expected to outline the government’s strategies to get growth back on track in his annual work report to the legislature in early March.

Presidential elections at two ends of the world will also take focus. On January 13, Taiwan’s electorate will vote for their candidate to occupy the Presidential Office Building on Ketagalan Boulevard in Taipei. On November 5, US voters will head for the voting booths to elect their occupant for the White House.

The eventual winners of both races will determine how the world’s most important – perhaps one of the most complex – relationships will play out over the next four years, with ramifications for the rest of the global economy.

Already, some positive steps have been taken since Xi Jinping met Joe Biden in November during the Asia-Pacific Economic Cooperation forum in San Francisco, putting a floor under deteriorating relations.

The US extended its tariff exclusions on some Chinese goods until May 2024 after the presidents met. The top brass of the US and Chinese militaries also talked on December 21 in a resumption of direct dialogue after more than a year, a positive “ice-breaking move” to avoid a crisis even if they did not resolve such hardcore issues as Taiwan and the South China Sea.

Watch out for the Post’s coverage of cross-strait and US-China relations from our correspondents in Taipei, Washington and New York.

11:11

The reasons behind China’s high youth unemployment rate

And in Hong Kong …

Several events will occupy the headlines in Hong Kong, where the Post has been the newspaper of record for 120 years.

Focus during the first quarter will be on the sedition trial of media owner Jimmy Lai Chee-ying, who stands accused under the national security law of using the former Apple Daily and an anti-China lobbying campaign to draw global sanctions against Beijing and Hong Kong officials during the anti-government protests that roiled the city five years earlier.

Hong Kong’s own version of the national security law, known as Article 23, will wend its way through the legislature to prohibit any act of treason, secession, sedition and subversion against the central government. It also covers the theft of state secrets, and bans foreign political organisations or bodies from conducting political activities in the city. How the legislature handles this process will be closely watched.

07:40

Murder, end of Covid and a once in a century rainstorm: Hong Kong in 2023

Borrowers may heave a little sigh of relief in 2024 when Hong Kong’s monetary authority cuts its base rate in lockstep with the US Federal Reserve, according to the Post’s survey of 10 economists. The most bullish prediction puts the cut as early as March, while half of the respondents expect the cost of money to fall starting from July. Global inflation will slow to 4.3 per cent in 2024, from 8.8 per cent in 2022, the International Monetary Fund said.

That should bring relief to the city’s businesses, who are wallowing in their worst slump in decades, as returning visitors have failed to spend enough to move the needle on the local economy.

The slump will drive Hong Kong’s government budget into a higher-than-expected deficit of over HK$100 billion (US$14 billion), putting pressure on Financial Secretary Paul Chan Mo-po – who has warned residents to gird for some “belt tightening – when he delivers the government’s budget in February.

Falling interest rates, with an anticipated weakening of the US dollar, would pave the way for global capital to find its way back to Asian markets, especially Hong Kong. The value of money raised via initial public offerings (IPOs) on the Hong Kong Exchanges and Clearing (HKEX) fell by half to a mere US$5.9 billion in 2023.

10:57

Boom, bust and borrow: Has China’s housing market tanked?

That was the worst show for Hong Kong in 20 years since the 2003 severe acute respiratory syndrome (Sars) pandemic ravaged the local stock market, even if few companies raised funds successfully anywhere, as the global IPO tally plunged by 26.7 per cent.

More than 90 companies – including Cainiao and Midea – are waiting for the opportune market conditions to kick off their IPOs in Hong Kong after filing their applications.

That would be much welcomed by Bonnie Chan as she takes over in May as the new chief executive of the HKEX from Nicolas Aguzin, who had to preside over Asia’s worst-performing stock index over the past year amid rising interest rates.

Gucho, as the outgoing CEO is known to colleagues, had hardly been idle: he expanded the HKEX’s footprint to New York and London to attract global companies to Hong Kong. HKEX also signed an accord with the Saudi Tadawul exchange, which would let Middle East companies, including Saudi Aramco, list in Hong Kong and quote their stocks in yuan, making them accessible to investors in mainland China.

Still, a recovery in the stock market would do little to halt Hong Kong’s property slump, where prices have fallen by about 21 per cent from their 2021 peak. There is another 10 per cent downside in 2024, UBS said, as developers slash prices to clear their inventory of completed homes amid the city’s housing glut.

Here, Hong Kong’s role in southern China’s Greater Bay Area is the key, as businesses face the opportunities of a much bigger market – the size of South Korea’s economy – with a combined population of more than 80 million residents. We can expect Hong Kong’s government to offer even more incentives to expand its talent scheme to attract skilled professionals, entrepreneurs and family offices to set up shop in the city.

Several large events will take place in Hong Kong in 2024. The Standard Chartered Hong Kong Marathon will return in January with the expanded capacity for 74,000 runners. A second Wealth for Good summit will kick off in late March just before Art Basel Hong Kong returns with its biggest show in years. Ticket sales have already started for the 2024 Cathay/HSBC Hong Kong Sevens rugby tournament, scheduled to mark its 30th anniversary in April. In November, the Hong Kong Monetary Authority is also poised to hold its third summit of global financial leaders.

Hong Kong’s Olympic medallists and hopefuls are training hard for the Summer Games in Paris, aiming to improve on their “greatest” collective performance at the Tokyo Games in 2020.

President Xi may attend the opening ceremony in the French capital, combining the trip with a state visit to France, which would be a major boost for China’s relations with the European Union.

All these add up to what promises to be another eventful year in 2024.

The Post has been diligently providing the most insightful news, analysis and coverage about China and Hong Kong since 1903. We thank you, Dear Reader, for your trust, confidence and for supporting our journalism.

We strive to do more, better and faster in the new year to fulfil our vision in elevating thought, and our mission to lead the global conversation about China.

60-Second Catch-up

Joe Biden, Xi Jinping, in first meeting in a year, agree to new talks

Vidoe: Xi Jinping, Joe Biden hold talks on sidelines of Apec summit to ease strained US-China ties

Infographic: Israel-Gaza war explained

China’s development biggest political priority at key economic meeting as leaders vow to counter risks, lift confidence in 2024

Video: The reasons behind China’s high youth unemployment

High interest rates not are going away ‘any time soon’ as global central bankers hunker down to tame inflation

China pays highest tribute as President Xi Jinping sends condolences on passing of ‘old friend’

Video: Has China’s housing market tanked?

Taiwan’s presidential election risks war, ex-Beijing official says as mainland steps up pressure over island

Hong Kong court rejects tycoon’s request to dismiss sedition charge in national security case

Infographic: How Xi Jinping and China’s Communist Party’s inner circles are all connected

HKEX names Bonnie Chan as its first woman chief executive, succeeding Nicolas Aguzin as head of Asia’s third-largest stock market

Deep dives

Has China ‘clearly estranged Israel’ with its stance on the war in Gaza?

China’s diplomatic efforts to stop the war appear to largely revolve around influencing Middle Eastern nations other than Israel
Even while seen as having some diplomatic sway with Iran, China does not seem willing or able to use its influence to affect the conflict, say analysts

In the past month or so China has stepped away from the sidelines of the Israel-Gaza war and towards the fray.

In mid-November, foreign ministers from Arab and Islamic countries stopped in the Chinese capital in their shuttle diplomacy to find an end to the conflict.

Asia at risk as Cop28 deal falls ‘far short’ of acceptable fossil fuel phase-out

Critics say the deal is still severely lacking when it comes to addressing the climate concerns of developing nations
Asia faces multiple obstacles to its clean energy transition, with countries such as China, India and Indonesia failing to provide clear timelines for ending coal usage

The United Nations Climate Change Conference in Dubai ended on Wednesday with a message signalling the eventual end to the fossil fuel era, but its lack of a clear timeline could leave parts of developing Asia increasingly vulnerable to climate shocks, experts said.

The conference, also known as Cop28, adopted within minutes of its presentation the proposed text for a final climate deal that acknowledges for the first time the need for “transitioning away from fossil fuels” and “accelerating action in this critical decade” to achieve net-zero carbon emissions by 2050.

02:52

China's 'two sessions': Premier Li Keqiang emphasises achievements, economy in final work report

Huawei’s Mate 60 Pro is a blow to US sanctions but battles remain, analysts say

Huawei has said little on the technology behind the chip in its latest phone, triggering an industry guessing game about its origins
Mate 60 Pro has triggered an outpouring of nationalist sentiment, with netizens hailing the device as proof that China can beat US sanctions

The China-made chip at the heart of the Mate 60 Pro phone launched by Huawei Technologies in the past week marks a clear win for the country in its attempts to defy Washington’s sanctions, but analysts say it is premature for Beijing to declare victory in the ongoing technology war.

Shenzhen-based Huawei, which has been denied access to advanced US origin chip technologies since 2020, has said little on the technology behind the chip in its latest phone, triggering an industry guessing game about its origins.

Hong Kong economy, property market eagerly await lower rates next year

All 10 analysts surveyed by the Post forecast the Federal Reserve would start cutting interest rates next year, with one expecting the first reduction in March
A rate cut would benefit Hong Kong’s property and capital markets, and help prevent further devaluation of the yuan, analysts say

Hong Kong businesses and mortgage borrowers can look forward to lower interest rates as the first rate cut in the US could come as early as March, with local banks following suit, according to a survey of 10 bankers by the Post.

All 10 bankers predicted the US Federal Reserve would start cutting interest rates sometime next year, with one expecting the first reduction in March. Four said it would happen during the April to June quarter, while the rest expect it in the second half of 2024.

Asia’s weird year: Dalai Lama’s gaffe, a ‘puking’ bird and AirAsia’s topless CEO

Dalai Lama set tongues wagging over a gaffe, a comedian slammed over a tasteless MH370 joke and AirAsia CEO soared online for being topless
Animals also made the news: a ‘puking’ bird became New Zealand’s feathered icon of the century thanks to John Oliver, while a man aspired to be a dog

As we bid farewell to 2023, here is a selection of the most peculiar stories published by This Week in Asia in the last 12 months.

The Dalai Lama, the 87-year-old spiritual leader of Tibetan Buddhism, set tongues wagging globally after a viral video of him asking a young boy to suck his tongue drew widespread condemnations.

03:59

Hong Kong music icon Coco Lee dies aged 48 after suicide attempt, sisters say

Chinese durian, Korea’s whisky fad: 2023’s most-read food and drink stories

The first China-grown durian piqued Post readers’ interest in 2023, as did a Singapore hawker’s global expansion and a Hong Kong hospitality veteran’s food picks
Tributes to MasterChef Australia’s late host got your attention, and so did a Hong Kong restaurant’s apparent copycat and a Chinese family’s market in Canada

From taste testing China’s much anticipated first home-grown durian to how a family who left Guangzhou, southern China, for Vancouver in 1981, built a fruit and vegetable empire in Canada, we look back at the food and drink stories most read by Post readers in 2023.

China’s much-anticipated first home-grown durian got the taste test in August from the Post’s Shea Driscoll.

Global Impact is a weekly curated newsletter featuring a news topic originating in China with a significant macro impact for our newsreaders around the world.

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