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The Chinese city of Hong Kong had a rough 2023. Hong Kong\u2019s economy grew by 3.2%<\/a> last year, slightly slower than economists expected, and far below the government\u2019s forecast of 4-5% at the beginning of 2023. A hoped-for post-COVID boom in travel and retail has fizzled out<\/a>. A slower-than-expected Chinese economy is also dragging down the city\u2019s stock market, with the Hang Seng Index now hovering around the level it was in July 1997<\/a>, when the city returned to Chinese sovereignty.\u00a0<\/p>\n \u201cIt pains me to admit it, but Hong Kong is now over,\u201d Stephen Roach, the former chairman for Morgan Stanley Asia, wrote in a Financial Times<\/em><\/a> <\/em>opinion piece in February.\u00a0<\/p>\n To make matters harder for Hong Kong, worsening tensions between the U.S. and China could put the squeeze on the city, which has long thrived on having links to both the Western and Chinese economies.\u00a0<\/p>\n Paul Chan, Hong Kong\u2019s Financial Secretary, is preaching a much different narrative: A more complicated international environment makes a place like Hong Kong essential.\u00a0<\/p>\n \u201cThe geopolitical challenge will be there for quite some time,\u201d Chan said in a conversation with Fortune <\/em>editor-in-chief Alyson Shontell at the Fortune Innovation Forum in Hong Kong on Wednesday.<\/p>\n \u201cGiven the current situation, the unique status of Hong Kong, under the One Country, Two Systems structure, becomes even more important,\u201d he said, referring to the structure in which Hong Kong will maintain legal, regulatory and economic systems apart from mainland China until 2047. In recent months, Chinese officials have suggested the system might persist<\/a> beyond that date.\u00a0<\/p>\n \u201cWe are different from the rest of China, in terms of our way of doing things in business, our standard procedures,\u201d he said. \u201cThis is a natural platform for you to get access to the mainland market, and as a springboard for Asia at the same time.\u201d<\/p>\n Still, Hong Kong is looking to markets outside of China, the U.S. and Europe for new opportunities. The Middle East in particular is a target for Chan. \u201cThis part of the world is less familiar to [Middle Eastern investors],\u201d he said. \u201cWe even considered using the Hong Kong Investment Corporation [the city\u2019s new investment company] to seed some of the new investments together.\u201d<\/p>\n The Hong Kong government is also trying to attract more people<\/a> to the city with a new talent visa, where those earning more than 2.5 million Hong Kong dollars ($320,000) a year, or graduates from one of the world\u2019s top 100 universities, can get a visa to live and work in Hong Kong. \u201cThey do not need a job,\u201d Chan noted.\u00a0<\/p>\n The city\u2019s financial secretary also responded to concerns that Hong Kong\u2019s new national security legislation could be a threat to its economy.\u00a0<\/p>\n Last week, Hong Kong\u2019s government speedily passed<\/a> expanded \u2018Article 23\u2019 national security legislation, which criminalized acts like theft of state secrets, sabotage, and external interference. The new law follows an earlier national security law<\/a> imposed by Beijing in 2020 after social unrest gripped the city in 2019.\u00a0<\/p>\n The U.S. and U.K. governments, among others, have criticized<\/a> the legislation as reducing Hong Kong\u2019s freedoms and violating the One Country, Two Systems structure. (Officials in Hong Kong and Beijing have blasted such accusations<\/a> as interference in Chinese internal affairs.)<\/p>\n Chan defended the new legislation on Wednesday, noting that the city was constitutionally obliged to pass a law of that nature. \u201cWhen you scrutinize [the Article 23 legislation], it\u2019s no different from leading jurisdictions like the U.K.,\u201d he said. \u201cWe want to ensure stability and safety\u2026so that we can concentrate our efforts to develop the economy.\u201d<\/p>\n While Chan did cite \u201cnot very fair\u201d storylines about Hong Kong, he said it was incumbent on the city\u2019s government to \u201creach out\u201d and invite more engagement.<\/p>\n \u201cIf people can come, make an investment, and make money, and for people to work on their career development and enjoy [their] lifestyle, then we will be able to succeed,\u201d he said.\u00a0<\/p>\n<\/div>\n\nNational security<\/strong><\/h2>\n