The use of Yuan for trade financing in Hong Kong is increasing as companies look for cost savings in the midst of US-China disputes. The lower financing costs of the Chinese currency and increasing offshore liquidity, along with a new platform, are enhancing its attractiveness.

The utilization of the yuan in trade finance is on the rise as businesses aim for cost savings and diversification of their supply chain in light of the ongoing US-China conflicts and enhancements in the currency's offshore fluidity, say leading financiers in Hong Kong.

"Since 2023, there has been an increased demand from businesses for trade financing in yuan, in the wake of US dollar rate increases," commented Wu Bin, who leads trade and working capital sales for Citi in Japan, North Asia, and Australia.

The pattern persisted into the previous year when China reduced its interest rates even more, he stated. He pointed out that there's a growing preference among internationally operating mainland firms to utilize the yuan for trade finance. This is primarily to manage the instability of foreign currencies and to optimize costs.

It is anticipated that the yuan will continue to have lower financing costs, as the disparity with the US remains significant due to the Federal Reserve's slower than anticipated reductions in interest rates.

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US President Donald Trump mellows down on potential China tariffs

Standard Chartered's Carmen Chan, who is in charge of trade and working capital for Greater China and North Asia, stated that there's a growing trend of using the yuan in trade finance. This trend is especially notable in industries like electric vehicles, solar panels, and engineering, procurement, and construction.

Could SHKP's 9,700-unit Sai Sha development rival Taikoo Shing or Lohas Park?

The leading property developer in Hong Kong is expected to release the first group of 781 apartments in the Sai Sha development within this financial quarter.

The leading property developer in Hong Kong is expected to release the first group of 781 apartments in the Sai Sha development within this financial quarter.

Sun Hung Kai Properties (SHKP), the largest real estate developer in Hong Kong, is ready to unveil apartments in a massive housing project in East New Territories. However, an industry expert suggests that inadequate transportation links may hinder the project's potential to rival prominent developments like Taikoo Shing or Lohas Park.

The property development in Sai Sha, located in Shap Sze Heung between Ma On Shan and Sai Kung, is set to offer a combined floor area of roughly 5 million square feet. This will be divided into approximately 4.7 million square feet for residential purposes and the remaining 288,000 square feet allocated for non-residential use.

"The Sai Sha scheme is among the most substantial combined developments by SHKP in the recent past, a concept that has taken several decades to come to fruition," stated the developer.

It is probable that SHKP will introduce the initial set of 781 apartments in the Sai Sha project within this quarter.

As of the end of December, the project was still awaiting the green light for presale approval from the Lands Department, says Xavier Lee, a stock market analyst at Morningstar. He further suggested that SHKP is expected to secure the presale consent shortly.

Snake Year: uncommon transactions and forced sales expected to dominate Hong Kong's real estate market

Veteran investors likely to hold back as educational and religious institutions look to acquire properties, according to market experts.

According to data gathered by Midland Realty, there was over an 11% decrease in the city's commercial property dealings in 2024, dropping to 3,461 from 3,906 in 2023.

According to Savills, the worth of business agreements plummeted 46 per cent annually, landing at HK$20.1 billion (US$2.6 billion). This data accounts for non-residential purchases where the buyer gained a minimum of 30 per cent stake in the property.

The property consultancy stated that only those buyers with significant cash reserves were successful in making transactions last year.

In 2024, non-profit bodies like educational institutions and religious groups saw a significant increase in their share of commercial deals worth HK$50 million and above in Hong Kong, rising to 14.2% from 2.8% in 2023, as per data from JLL.

Hong Kong shares fall due to Trump's tariffs while investors anticipate China's reaction. According to Goldman Sachs, these tariffs may hinder China's economic progression and compel the central bank to refrain from relaxing monetary policies.

On Monday, the Hang Seng Index experienced a slight decrease of 0.04 per cent, finishing at 20,217.26, following a significant 2.3 per cent drop as the market resumed after a three-day pause. On the other hand, the Hang Seng Tech Index saw a minor increase of 0.3 per cent.

Trading on domestic stock markets was halted for the Lunar New Year celebration and will recommence on Wednesday. The key CSI 300 index saw a decline of 3 per cent in January.

Baidu, the tech behemoth, experienced a 3.8% decrease, bringing its shares to HK$84.45. Meanwhile, electric car manufacturer Li Auto saw a 5.7% drop in its shares, reducing its value to HK$86.65. Sands China, a casino business, also experienced a loss, with a 7% decrease in share value to HK$17.30. Similarly, fellow casino enterprise Galaxy Entertainment saw a 5.9% decline, with shares dropping to HK$

Capping off its losses, the chip manufacturer known as Semiconductor Manufacturing International (SMIC) saw a rise of 10.3 per cent, reaching HK$41.90, while the e-commerce behemoth, Alibaba Group Holding, saw an increase of 6.5 per cent, taking it to HK$94. Alibaba is the owner of the Post.

The expansion of China's industrial production decelerates once more in the face of looming Trump tariffs. An essential measure of China's manufacturing operations surprisingly dropped in January, emphasizing the financial difficulties confronting Beijing.

Contrary to expectations, China's manufacturing sector experienced a downturn for the second consecutive month in January. This highlights the necessity for the Chinese government to increase economic incentives, especially as US President Donald Trump imposes trade taxes on the nation's exports.

The manufacturing purchasing managers' index (PMI) from Caixin dropped to 50.1, marking a four-month low, down from 50.5 in December, as per a report published by Caixin and S&P Global on Monday.

Although a reading over 50 signifies an increase in activity, this number was significantly lower than the predicted median of 50.6 by economists polled by Bloomberg.

"The significant difficulties originated from a considerable decrease in jobs, slow foreign demand, and low pricing," stated Wang Zhe, a leading economist at Caixin Insight Group, with the announcement's release.

"Potential instability in global policies may negatively impact China's export landscape, creating substantial hurdles for its economy."

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Trump plans to impose 25% tariffs on Mexico and Canada starting February 1.

'Golden Pathway': Head of Hong Kong's gold exchange envisions city as central point for belt-and-road initiative

The chairman of HKGX anticipates an increase in gold prices and trading volume during the Year of the Snake

The chairman of HKGX predicts a surge in gold prices and trading activity during the Year of the Snake

The leader of Hong Kong's gold exchange predicts an increase in gold prices and trading activity in the upcoming lunar year due to geopolitical tensions and anticipated cuts in interest rates. The exchange is also planning to expand its role in Hong Kong's endeavor to transform into a commodities hub.

Haywood Cheung Tak-hay, the chairman of the Hong Kong Gold Exchange (HKGX), predicted on Monday that the price of gold could reach or surpass US$3,000 per ounce (28.3 grams) in the Year of the Snake. He also anticipated a worldwide increase in trading volume of up to 30 percent.

The cost of gold surged by 35% during the Year of the Dragon, reaching HK$25,600 per tael (equivalent to US$3,282 for 37.9 grams), while the global value for gold peaked at an unprecedented rate of US$2,790.07 per ounce in October.

Analysts predict that the value of gold will keep increasing. This is because investors are using the precious metal as a protective measure due to anticipated interest rate reductions and a pessimistic economic forecast.

Previously known as the Chinese Gold & Silver Exchange Society, HKGX transitioned from a club to a business entity towards the end of last year and commenced activities under its new title on the first day of January.

SoftBank collaborates with OpenAI to advance AI technology in Japan while DeepSeek gains traction. Despite cheaper alternatives from China's DeepSeek, SoftBank Group firms plan to invest $3 billion annually in OpenAI's resources.

Companies under the SoftBank Group umbrella, which encompasses investments like PayPay and LY, are set to collectively invest $3 billion annually on tools from the US company.

SoftBank is now part of an expanding list of technology giants such as Meta Platforms and Microsoft, who are investing billions of dollars to establish the groundwork for future AI advancement and application.

The head of the Hong Kong Monetary Authority (HKMA), Eddie Yue, asserts that Hong Kong is in a strong position to handle the repercussions of a trade war. Despite potential economic challenges, the variety of export markets and the backing of Beijing will help to lessen any adverse effects, according to Yue.

Eddie Yue Wai-man stated that the city's unofficial central bank was keeping a close eye on the evolution and effect of trade tensions following the declaration of tariffs on products from China, Canada, and Mexico by US President Donald Trump.

"If a trade war or trade conflict arises, it could affect global economic inflation and possibly the supply chain," Yue mentioned on Monday following a discussion with Legislative Council members. "No economic system will profit from it and there would be no victors."

The specifics of the tariff strategies and response methods are still unclear, and they could potentially hinder global economic growth and increase inflation rates not only in the US but also worldwide, according to Yue. Beijing announced on Sunday that it plans to contest Trump's tariffs at the World Trade Organization and implement counteractions to protect its interests.

The interest rate decisions of the US Federal Reserve are crucial to Hong Kong, according to Yue. This is due to the fact that Hong Kong's monetary policy has closely followed the Fed's since 1983, under its tied exchange rate system.

He further added that the general trend of the interest-rate cycle was declining, despite the fact that the extent of the reductions was still unclear and the speed was not as fast as anticipated.

In light of elevated interest rates, Yue warns those in Hong Kong to exercise caution when obtaining loans or managing their mortgages. He also stated that the HKMA will keep a close eye on the state of non-performing loans.

DeepSeek from China provides a chance for European tech companies to advance in the worldwide competition for AI dominance. Executives state that DeepSeek is a major leap towards making AI more accessible for tech startups in Europe.

The advent of DeepSeek is transforming the AI sector, providing businesses with the opportunity to leverage sophisticated technology at significantly reduced costs, based on discussions with numerous start-up leaders and investors. It could also drive competing AI firms to enhance their models and lower their prices.

"DeepSeek proposed a deal that was remarkably less expensive – five times less than their normal rates," stated Mandapati. "I'm managing to save a significant amount of money and the users aren't noticing any disparity."

Tech start-ups in Europe have found it challenging to integrate AI systems as swiftly as their competitors in the US, who have simpler paths to financial resources. However, executives have suggested that DeepSeek might be a pivotal tool in shifting this scenario.

"This represents a major progression in making AI more accessible and equalizing the competition with major tech companies," stated Seena Rejal, the Chief Commercial Officer of the UK-based company NetMind.AI, which is one of the early users of DeepSeek.

Henan, a central province of China, is encouraging its local business owners to bravely make investments despite the economic downturn. The province has assured that it will safeguard and heed the concerns of the private sector, as Chinese authorities are working hard to regain trust and bolster the economy.

Henan province in China, known for being one of the country's major industrial centers, has called on business leaders to bravely invest in the area. This is part of China's ongoing efforts to boost trust in its unstable private sector.

Top authorities in Henan, the most populated province in China and its sixth biggest provincial economy, hosted a Lunar New Year lunch for local entrepreneurs on Sunday as a part of a public relations campaign by the government.

The governor of Henan province, Wang Kai, encouraged the gathered business leaders to bravely engage in business ventures and investments during the dinner. He assured them that the local government would back the private sector by offering top-notch services, as reported by local press.

"Wang stated that they would persist in enhancing policies, safeguarding your rightful privileges and concerns, and taking into consideration your requirements to establish a premier business atmosphere."

China is worried about the poor statistics coming from private investments, as the private sector contributes 50% to the government's tax revenue, 60% to the country's total economic production, and 80% to urban employment.

Adrian Cheng from K11 reemerges in a French cultural collaboration with President Emmanuel Macron. The ex-CEO of New World Development emphasizes their concentration on the worldwide growth of the cultural sector.

I had the privilege to meet France's President Emmanuel Macron along with his team last week. We had an invigorating conversation concerning the importance of cultural exchanges in establishing a crucial link between the East and West," shared Cheng via a social media post on Monday.

On January 25, Cheng and Macron held a confidential conversation at the Elysee Palace. In the course of this discussion, Cheng expressed his goal of promoting cultural interactions between China and France via KAF, an organization he established in 2010.

"Cheng stated that our primary concern is the worldwide growth of the cultural sector."

"This conversation not only underscored these prospects but also laid the groundwork for inventive collaboration in the worldwide cultural arena."

The robustness of the US dollar is of more concern to Asian markets than the tariffs imposed by Trump on China, according to Hang Seng Bank. Despite this, the outlook for Asian stocks is still favorable, thanks to China's stimulus strategies and sturdy trade connections with Asean, as stated by a representative from Hang Seng Bank.

The effect of US President Donald Trump's tariffs on Chinese goods on Asian stocks will be significantly less compared to the influence of a robust US dollar, which is uncertain due to potential rate cuts from the Federal Reserve. This is according to statements from Hang Seng Bank.

"Belle Liang, the chief of investment advisory, asserted on Monday that Trump's tariffs have a minimal effect on China's economy following the bank's decision to keep its prime rate steady. Liang further stated that the mid to long-term outlook for Asian stocks continues to be promising, attributed to China's economic boost strategies and its strengthening trade ties with Asean (the Association of Southeast Asian Nations)."

She further stated that a more robust US dollar could negatively impact capital movements in the near future, particularly in markets that have comparatively high price-to-earnings ratios.

"This year, the risk in investments focuses more on the effects of Trump's strategies than the Federal Reserve's interest rate verdicts," stated Liang.

Leading financial institutions in Hong Kong announced on Monday that they will maintain their prime rates – the rates given to their top-tier clients – as they currently are. This action follows the stance of the Hong Kong Monetary Authority, who decided on January 30 to hold their main interest rate steady, in alignment with the U.S. Federal Reserve's decision.

HSBC confirmed through an announcement that it will maintain its premier lending rate at 5.25 per cent. The leading financial institution in Hong Kong last reduced its prime rate by 12.5 basis points on December 20, a decision influenced by the Federal Reserve's choice to decrease its rate by a quarter point.