Hong Kong Chief Executive Carrie Lam speaks during a press conference in Hong Kong, China, February 3, 2020. EPA
Hong Kong Chief Executive Carrie Lam speaks during a press conference in Hong Kong, China, February 3, 2020. EPA
Hong Kong Chief Executive Carrie Lam speaks during a press conference in Hong Kong, China, February 3, 2020. EPA
Hong Kong Chief Executive Carrie Lam speaks during a press conference in Hong Kong, China, February 3, 2020. EPA

China says it opposes 'barbarous and rude' Hong Kong sanctions by US


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China's office in Hong Kong on Saturday denounced Washington's decision to sanction key officials over sliding freedoms in the business hub, calling the move "barbarous and rude".

"The ill intentions of US politicians to support people who are anti-China and messing up Hong Kong have been clearly revealed," Beijing's Liaison Office in Hong Kong said in a statement.

The US on Friday imposed sanctions on Hong Kong officials, including the pro-China leader of the government, accusing them of cooperating with Beijing's effort to undermine autonomy and crack down on freedom in the former British colony.

The sanctions are the latest in a string of actions the Trump administration has taken targeting China as tensions between the two nations rise over trade, Covid-19 and other issues. President Donald Trump's offensive against China comes as he assigns full blame to Beijing for the coronavirus outbreak in the US, deflecting criticism of his own handling of the pandemic that threatens his re-election.

The Treasury Department announced sanctions on Carrie Lam, the leader of the government in Hong Kong, and 10 other officials. The sanctions were authorised by an executive order that Mr Trump signed recently to levy penalties against China for its efforts to curtail anti-government protesters in Hong Kong.

Hong Kong has long enjoyed civil liberties not seen in mainland China because it is governed under a "one country, two systems" principle in place since it reverted to Chinese rule in 1997.

However, Beijing imposed a sweeping national security law on Hong Kong earlier this year, raising widespread concerns about the Chinese government cracking down on the anti-government protests.

"The recent imposition of draconian national security legislation on Hong Kong has not only undermined Hong Kong's autonomy, it has also infringed on the rights of people in Hong Kong," the Treasury Department said in a statement.

Treasury said the new law has allowed authorities in mainland China to operate with impunity in Hong Kong, has mandated "national security education" in Hong Kong schools, undermined the rule of law and laid the groundwork to censor individuals and outlets "deemed unfriendly" to China.

The US said Lam, the chief executive of Hong Kong, is "directly responsible for implementing Beijing's policies of suppression of freedom and democratic processes." Last year, Lam pushed to allow citizens to be extradited to the mainland, setting off massive opposition demonstrations in Hong Kong, according to Treasury.

Hong Kong Commerce Secretary Edward Yau called the sanctions "unreasonable and barbarous" and said they would harm US interests in the city, an Asian financial and shipping hub.

One of the sanctioned officials, the head of the central government's liaison office in Hong Kong, said being included on the list shows that he has done what he should for his country.

"I don't have a penny of assets abroad. Isn't it in vain to impose 'sanctions'? Of course, I can also send 100 US dollars to Mr. Trump for freezing," Luo Huining said in a statement on the office's website.

Sen Ben Sasse, R-Neb, a member of the Senate intelligence committee, called Lam "Beijing's hatchet woman."

He said she has worked with the Chinese Communist Party to kill Hong Kong's autonomy and gut the rule of law. "These cowards betrayed the freedom-loving people of Hong Kong and deserve to pay a steep price," he said.

Also sanctioned was Chris Tang, the commissioner of the Hong Kong Police Force, for allegedly "coercing, arresting, detaining, or imprisoning individuals" under the new security law, and the former police commissioner, Stephen Lo.

Friday's action blocks all property or other assets that the individuals have within US jurisdiction.

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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