On May 9, 2019, the US government announced that the US will increase tariffs on US$200 billion worth of Chinese products from 10 percent to 25 percent, effective Friday, May 10. Three days later, China retaliated and announced to raise tariffs on $60 billion of US goods, starting from June 1.
Hong Kong was the world's 7th largest trading entity in goods in 2018. Given its geographical location, well-developed financial services and international outlook, Hong Kong plays an important entrepot role for the trade between the Mainland China and the rest of the world. In 2018, the value of goods re-exported through Hong Kong from and to the Mainland was US$467.6 billion, accounting for 89.1% of Hong Kong's total re-export trade value.
Companies that rely on suppliers to provide goods or services are always exposed to the financial risks. When the economic environment is difficult, there will always be suppliers that go bankrupt as a result. Due to the US China trade war and an economic slow-down in China, in 2019, the number of companies filing for bankruptcy in China will increase by one-fifth, while last year this number surged by 60%.
SMEs are the main force of the Chinese economy: they account for 97% of total businesses, 60% of GDP, 70% of import/export trading revenue, 80% of total urban employment, and more than 50% of national tax revenue.