Executive Councillor and former head of the Hong Kong Monetary Authority, Joseph Yam, said on Sunday that he doesn’t think the US will wage a “financial war” against China, but even if it does, it’s unlikely to afflict Hong Kong.

Speaking on a Commercial Radio programme, Yam said the US may be jealous of China’s rapid development, but even if it wants to besiege the mainland with “financial weapons”, it has to be mindful of possible backlashes such as the loss of confidence in US dollar.

He said Hong Kong might even benefit if the financial dispute between the two countries intensifies.

“I don’t think the biggest economies in the world would detach from each other completely despite all their fights and grudges,” he said.

“If both of them respect One Country, Two Systems, Hong Kong may take up an even more significant role. If China and the US don’t have direct capital flow, when mainland companies want to collect fund, there will be different limitations such as requirements on accounting or information disclosure, they will come back to Hong Kong,” he said.

Yam said while the peg between the Hong Kong currency and the US dollar should stay, the SAR government should consider whether it’s possible to explore alternative means to use its reserve given the changes in geopolitics.

“If we continue to put our financial surplus in the exchange fund, which in turn uses the money to buy US debts, it means it is lending Hong Kong people’s money to the US government,” he explained.

“This government is fighting a trade war or possibly a financial war with our country. Could it be possible – for the sake of Hong Kong’s future – for us to set up a new body to develop the Northern Metropolis and invest in Hong Kong’s future? We have to think about how to go ahead,” he said.