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'Law and order returned' Hong Kong's US-sanctioned leader tells bankers

Hong Kong's US-sanctioned leader said political stability and business confidence have been restored following the crushing of democracy protests, as he opened a summit on Wednesday attended by global bankers including leading Wall Street executives.

The Asian business hub is hosting a week of high-profile events after years of political unrest and pandemic travel curbs tarnished the city's business-friendly reputation, sparked an exodus of talent and battered its economy.

The marquee event at the Four Seasons hotel was heralded by city leader John Lee as proof that the previously shuttered metropolis is back in business.

"We were, we are and we will remain one of the world's leading financial centres. And you can take that to the bank," Lee told delegates.

A former security chief who took office this year, Lee is among the Chinese officials sanctioned by Washington for cracking down on rights in Hong Kong after huge democracy protests.

Most of the city's political opposition are either behind bars or have fled overseas since those protests.

Blacklisted individuals are unable to hold accounts with the same banking giants attending the summit.

"Social disturbance is clearly in the past and has given way to stability, to growing business and community confidence in Hong Kong's future," Lee said in his summit speech.

"Law and order has returned. The worst is behind us."

- US criticism -

Among those speaking at the summit were Goldman Sachs head David Solomon, Morgan Stanley CEO James Gorman, Blackrock president Rob Kapito and JP Morgan Chase counterpart Daniel Pinto.

But their presence is not without controversy.

Last week, the leaders of the bipartisan US Congressional-Executive Commission on China called on Wall Street executives not to attend, accusing them of "whitewashing human rights violations" and giving political cover to Lee.

The row illustrates the tightrope faced by multinationals in Hong Kong, which is both a lucrative business gateway for China and a flashpoint in increasingly tense relations between Beijing and Western powers.

In his speech Lee said the city has an "irreplaceable connection" to mainland China for global businesses "as the centre of economic gravity in the world shifts eastward".

The summit comes at a time of uncertainty over China's economy under President Xi Jinping.

Xi, who secured a norm-breaking third term last month, has overseen regulatory crackdowns clipping the wings of some major Chinese companies and is still sticking to a strict zero-Covid strategy.

- 'Don't read international media' -

Lee's speech was followed by recorded interviews with three top officials involved in regulation, including Fang Xinghai, vice chairman of the China Securities Regulatory Commission, who criticised international press coverage of China.

"Don't read too much of international media," Fang said, sparking laughter from the audience.

Those comments received backing from both UBS chairman Colm Kelleher and Liu Jin, president of Bank of China.

"Like Vice Chairman Fang said we're not reading the American press, we all buy the story," Kelleher told delegates.

He added that while investors were closely watching Beijing for signs of reopening, international bankers were "very pro-China".

Much of the discussion focused on the wider global economy where spiralling inflation rates and geopolitical uncertainty have hit sentiment.

"My gut is the central banks will, in aggregate, tame inflation," Morgan Stanley chief Gorman told delegates in one of the more positive assessments.

Former governor of the Bank of England Mark Carney painted a more stark portrait.

"We're headed very likely to a global recession," he said, citing -- among other things -- China's strict zero-Covid controls and the fallout in Europe of Russia's invasion of Ukraine.

The Hong Kong summit is being held in a bubble that keeps delegates away from residents.

While Hong Kong scrapped mandatory quarantine in September -- a key demand of businesses -- it maintains layers of pandemic restrictions long since abandoned almost everywhere else.

Overseas arrivals must undergo frequent testing and are unable to go to bars and restaurants for their first three days in the city.

Restrictions on various gatherings remain and masks are compulsory, including outdoors.

Hong Kong's leaders are keen to resuscitate the city's fortunes. The city is headed for a full recession with gross domestic product plunging 4.5 percent in the third quarter of this year.

Its stock exchange is among the world's worst performers, down more than 50 percent this year to levels last seen in 2009.

China is the last major economy committed to a zero-Covid strategy, persisting with snap lockdowns, mass testing and lengthy quarantines that have stamped out outbreaks but created growing economic pain.

bur-jta/ser