Hong Kong sees slow economic growth amid US-Chinese trade tension

Hong Kong's economic growth slowed in the latest quarter and the government warned it could face headwinds from US-Chinese trade tension and higher interest rates.

Government data Friday showed the Chinese territory's economy expanded by 2.9 per cent over a year earlier, down from the previous quarter's 3.5 per cent.

Exports rose 5 per cent over a year earlier, but the government said the impact of trade tension and weaker global demand "has begun to surface" and is "likely to become more apparent in the near-term."

The government said Hong Kong also faces a drag from higher interest rates. The Hong Kong dollar has a fixed exchange rate with the US dollar, which requires the central bank to raise interest rates along with the US Federal Reserve even though economic growth is slowing.