Recently, the Hong Kong dollar exchange rate has plummeted while the linked exchange rate system has been challenged. It is worrying that the Hong Kong dollar is facing major risks. The basis for the exchange rate of the Hong Kong dollar was damaged. Apart from the "technical factors" of arbitrage trading, it is also related to some macro factors. The external market's expectations of China’s economy and reform and opening up, Hong Kong’s sandwich position between the Chinese economy and the world market, and the issue of Hong Kong’s political and economic situations have all affected the market confidence. Such complex situation cannot be overlooked by both the Central Government and Hong Kong.