Harvard's Reinhart warns Hong Kong could trigger world recession

A general view of the financial Central district in Hong Kong, July 25, 2019. (PHOTO: REUTERS/Tyrone Siu)

By Enda Curran

(Bloomberg) -- Hong Kong’s rolling political turmoil could prove a tipping point for the world economy, Harvard University economist Carmen Reinhart said.

Noting an incidence of shocks that have rattled global growth, including the intensifying U.S.-China trade war, Reinhart cited Hong Kong as among her main concerns.

"One shock that is concerning me a great deal at the moment is the turmoil in Hong Kong," which could have consequences for growth in China and Asia generally, Reinhart said in an interview with Bloomberg Television’s Kathleen Hays. "These are not segmented regional effects, these have really global consequences."

"What could be a tipping point that could trigger a really significant global slowdown, or even recession -- that would be a candidate, that could be a candidate," said Reinhart, who specializes in international finance.

Anti-government protests that began nearly three months ago are pressuring Hong Kong’s economy, which already was being squeezed by China’s economic slowdown and the trade war.

Reinhart previously has warned that Hong Kong faces a housing bubble.

"You could have shocks with a bang or with a whisper," she said.

© 2019 Bloomberg L.P.