Companies in Hong Kong are forced to take side between China and the West
Using Hong Kong as a hub to operate across Europe and Asia has brought profits to many companies. But as China's relations with the West become more tense, this advantage becomes a tearing factor, which is disturbing and unstable. To make matters worse, the economic downturn caused by the new crown epidemic forced some of these companies to seek government assistance, which may cause companies to face greater risks in supporting future views opposed by Beijing.
Hong Kong's flagship airline Cathay Pacific Airways Ltd. is now in this situation. The company said on Tuesday that as part of a $5 billion financing plan, the Hong Kong government will inject $3.5 billion into the company . The transaction will also allow the government to obtain warrants, which may eventually be converted into a 6% stake in Cathay Pacific. The government can appoint two observers to the board of directors, which may give the government a say in the company's operations.