McDonald's Sells Hong Kong Real Estate — The Beginning of the End for the Hong Kong Dollar?

Following the previous article, “Li Ka-shing, Hong Kong's Richest Tycoon, Dumps Hundreds of Properties—China Is Not Fine”, I continue to reflect on the mounting financial risks from China. McDonald’s recent decision to sell off real estate holdings in Hong Kong aligns suspiciously with Li Ka-shing’s earlier property liquidation. The key question is this: Why are global corporations, Asia’s richest tycoon, and major foreign banks all rushing to exit Hong Kong real estate? The answer may lie in what K3-Lab sees as the next phase of U.S.-China conflict—with Hong Kong at the center.

1. Why Is the U.S. Targeting Hong Kong?

Why are global companies and wealthy elites leaving Hong Kong? It all comes down to Hong Kong’s role within China. For decades, Hong Kong functioned as a financial bridge between communist China and the capitalist, dollar-based global financial system.

China needed to maintain strict capital controls due to its socialist framework, but it also required external funding to fuel growth. The solution was Hong Kong. With its rule of law, free capital flows, and dollar-linked currency, Hong Kong became China’s most effective financial gateway.

To the West, Hong Kong offered investment access to mainland China. To China, it offered access to global capital. It was a dual-purpose hub, linking Chinese and Western interests.

In the 2000s, it served as a safe offshore vault for Chinese elites. In the 2010s, it was a testbed for RMB internationalization. More recently, Hong Kong became a bypass platform for Chinese firms facing U.S. sanctions, enabling secondary listings on the Hong Kong Stock Exchange.

But now, that structure is collapsing. The U.S. revoked Hong Kong’s special trade status, while China imposed its National Security Law, effectively bringing Hong Kong under full political control. As a result, Hong Kong is no longer a unique semi-autonomous zone but simply another Chinese city—and for foreign capital, this is a dealbreaker.

Capital no longer sees Hong Kong as a safe intermediary. This shift makes it harder for China to raise funds externally—and may soon become Beijing’s Achilles’ heel.

2. U.S. and China: A Clash of Monetary Policy

With global supply chains shifting away from China, Beijing is finding it increasingly difficult to find export markets. This leaves domestic demand stimulation as the only option, pushing Chinese policymakers toward rate cuts and reserve ratio reductions.

However, China cannot act freely. If the U.S. maintains high interest rates, capital will flow out of China, putting downward pressure on the yuan.

At the same time, former President Trump is pressuring the Fed to slash interest rates from 4.5% to 1%, aiming to boost growth. If this happens, it would give China the green light to ease its monetary policy. But that leads to a new risk.

The U.S. is also simultaneously pushing tariff hikes and massive fiscal expansion—primarily to restore industrial and technological dominance. But this strategy leads to massive Treasury issuance, creating pressure on the bond market. The result?→ Even with a rate cut, market interest rates could spike violently due to a bond market tantrum.→ For China, this means any attempt to stimulate its domestic economy could backfire.

3. The Cracks in the Hong Kong Dollar Peg

The next fracture point is Hong Kong. The Hong Kong dollar (HKD) is pegged to the U.S. dollar, meaning Hong Kong must follow U.S. interest rate policy to maintain the peg. But Hong Kong’s local economy is deteriorating rapidly.

Since the escalation of U.S.-China tensions, Hong Kong has faced persistent capital outflows. Maintaining the peg is increasingly expensive.

Now Hong Kong faces a trap:

• If it raises interest rates: consumption and real estate collapse

• If it doesn’t: interest rate differentials widen, breaking the peg, and triggering capital flight

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Either way, the peg becomes unsustainable—and the result could be a full-blown currency and asset market crisis.

4. Dollar Strength, Yuan Weakness, and Capital Flight

To prevent a Hong Kong crisis from spreading to the mainland, China would have to inject capital into Hong Kong—likely in U.S. dollars. But this would drain China’s foreign exchange reserves, putting downward pressure on the yuan.

If the yuan weakens further while the dollar strengthens, we could witness a full-scale U.S.-China currency war. Financial markets would spiral into deeper instability.

That’s why global capital is preemptively pulling out of Hong Kong. McDonald’s, Li Ka-shing, and major financial institutions are likely acting with full awareness of what’s coming.

The U.S. doesn’t need to strike Beijing directly. It is attacking from the flank—via Hong Kong. And it is doing so not with missiles, but with liquidity traps, interest rate gaps, and currency pressure.

Conclusion: The Weaponization of the Dollar

The U.S. has already completed the first phase: supply chain and manufacturing decoupling. Now it is entering phase two: financial and currency decoupling.Its playbook?→ Break Hong Kong’s currency peg→ Force yuan devaluation→ Trigger capital flight→ Pull global capital back into the dollar system

This is how dollar hegemony is maintained—and how MAGA becomes more than a slogan.

“When will Hong Kong’s currency peg break?”This question isn’t just about forex mechanics. It marks the beginning of a larger conflict: a financial war between empires. For investors, this is why cash is king—for now.