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Hong Kong turmoil threatens to disrupt $4tn investment flow

China's grip over the city risk status as region's financial hub

TOKYO/HONG KONG -- China's move to tighten its grip over Hong Kong is rocking the semi-autonomous Chinese city. Investment by foreign countries to and from Hong Kong totals $4 trillion, or more than half of the investment between China and other countries. If this flow is disrupted due to destabilization, it could pose an unexpected risk to the world economy.

The new national security law Beijing is imposing on the territory is expected to come into effect by the end of June, allowing a stricter crackdown on dissident activities. The one country, two systems political framework, which has shored up Hong Kong's prosperity, is on the verge of collapse, threatening Hong Kong's status as a world financial center.

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