Hong Kong could trigger world recession, warns Harvard economist Carmen Reinhart

Anti-government protests that began nearly three months ago are pressuring Hong Kong's economy, which already was being squeezed by China's economic slowdown and the trade war.
Anti-government protests that began nearly three months ago are pressuring Hong Kong's economy, which already was being squeezed by China's economic slowdown and the trade war.PHOTO: AFP

HONG KONG (BLOOMBERG) - Hong Kong's rolling political turmoil could prove a tipping point for the world economy, Harvard University economist Carmen Reinhart said.

Noting an incidence of shocks that have rattled global growth, including the intensifying United States-China trade war, Professor Reinhart cited Hong Kong as among her main concerns.

"One shock that is concerning me a great deal at the moment is the turmoil in Hong Kong", which could have consequences for growth in China and Asia generally, she said in an interview with Bloomberg Television's Kathleen Hays. "These are not segmented regional effects, these have really global consequences."

"What could be a tipping point that could trigger a really significant global slowdown, or even recession - that would be a candidate, that could be a candidate," said Prof Reinhart, who specialises in international finance.

Anti-government protests that began nearly three months ago are pressuring Hong Kong's economy, which already was being squeezed by China's economic slowdown and the trade war.

Prof Reinhart previously warned that Hong Kong faces a housing bubble.

"You could have shocks with a bang or with a whisper," she said.