Sticking with the US dollar has served Hong Kong well. Since it introduced a linked exchange-rate system 27 years ago, the city has endured at least half a dozen external shocks that would have knocked less-protected economies well and truly off course. Yet as the greenback edges to within 3 per cent of its post-73 trade-weighted low, while Beijing starts to swamp its special administrative region with renminbi liquidity, it is worth examining the alternatives.

The Hong Kong Monetary Authority is clear enough: its choice of “anchor currency” should take two tests into account. The first – the predominant denomination of external trade and financial transactions – still clearly favours the US dollar: renminbi-denominated trade between Hong Kong and the mainland was Rmb53bn in the first half, a tiny fraction of the whole. The second – the stability of the monetary regime governing that currency – is where it gets problematic. Tim Geithner’s extraordinary denial that the US is deliberately weakening its currency is a reminder that the HKMA should no longer talk blithely of the “unparalleled credibility” of US monetary policy.

The growing misalignment of the Hong Kong and US economies can no longer be ignored. As advisory firm China Analytics points out, this is increasingly a social issue: local employers have benefited from rapid productivity growth and low wages on the mainland while granting wage hikes more in line with output and inflation in the US. A re-pegging – either to the renminbi or to a basket of currencies – should not be dismissed out of hand. At the very least, the debate deserves a public airing, rather than the stock response from the HKMA. If the world really is witnessing the opening salvoes of a currency war, it’s time for Hong Kong to take sides.