HK leader warns of 'ruin' as massive strike chokes city, airport

Hong Kong

HONG KONG leader Carrie Lam warned of a "very dangerous situation" as protesters moved to shut down the Asian financial hub with a general strike on Monday after a ninth straight weekend of unrest in opposition to China's tightening grip.

Demonstrators hampered the financial hub's busy morning commute with actions that left traffic snarled, subway lines inoperable and airport operations disrupted. Cathay Pacific Airways said it cancelled more than 140 flights coming to and from the city, while Hong Kong Airlines scrapped 30 flights.

Thousands of black-shirted protesters rallied on Monday afternoon in locations across the city, chanting "strike!" and blocking roads. Police fired tear gas to disperse crowds in Admiralty near the city's Central Government Offices. Across the harbour in Kowloon, riot police also used tear gas to disperse crowds that barricaded key arteries.

"We have seen some behaviour from protesters that is challenging 'one country, two systems' and threatening national sovereignty," Ms Lam told reporters earlier on Monday, flanked by senior members of her administration. "And I could even dare to say some are trying to ruin Hong Kong and completely destroy the livelihood of seven million citizens."

The protest movement that began in June to oppose a bill that would've allowed extraditions to the mainland has morphed into a broader challenge to China. Authorities in Beijing have continued to back Ms Lam, who has resisted demands to withdraw the bill completely and step down from her position.

The MSCI Hong Kong Index slumped as much as 3.5 per cent on Monday in a ninth day of declines, matching the longest streak since the city's 1997 handover from British rule.

The unrest has hit the city's economy, denting tourism and retail sales to worsen the pain from the US-China trade war. The IHS Markit PMI for Hong Kong sank to 43.8 in July from 47.9 a month earlier. That's its lowest reading since March 2009, when the fallout from the global financial crisis was still raging. Financial Secretary Paul Chan warned on Monday that the city risks a recession as protests continue.

"The problem now is there is no real end in sight as to what the end game is for the protests," said Sean Darby, global equity strategist at Jefferies Hong Kong. "The disruptions that are occurring now both to travel and the people shopping or even coming into Hong Kong are starting to make quite a big impact on the economy."

Ms Lam on Monday didn't make any new concessions to protesters, saying she didn't think her resignation - one of their key demands - would provide a resolution to the unrest. She also called them a threat to national security, hours after they interrupted service on nearly all of the city's metro lines - though it resumed by early afternoon.

"Such extensive disruptions in the name of certain demands or uncooperative movement have seriously undermined Hong Kong's law and order and are pushing our city - the city we all love, and many of us helped to build - to the verge of a very dangerous situation," she said.

Hong Kong police recently began slapping protesters with colonial-era rioting charges in a bid to deter large numbers of protesters, and anxiety is growing that Beijing might call in its army, which released a video last week showing troops practising riot control. Senior Superintendent Kong Wing-cheung said on Monday he believes there's no chance that Chinese troops would be deployed.

Still, senior police officials alleged that "radicals" were planning to attack or even kill officers. Mr Kong said 82 people had been arrested on Monday and a total of 420 had been detained since June 9, when an estimated 1 million people hit the streets. Police have also deployed 1,000 rounds of tear gas since June, Mr Kong said. Another official, Yolanda Yu, said the age of the protesters arrested on Monday ranged from 14 to 76.

"I came here to support the young people," said C F Tse, who works in accounting and said he asked for sick leave in order to protest in Tamar Park on Monday. "It's heartbreaking to see them being beaten up and getting tear gassed."

On Monday afternoon in China, searches for "Hong Kong strike" and "strike" brought up zero results on popular messaging app WeChat, though the phrase "Hong Kong violent incident" did show articles on the protests. All three searches were available on Weibo, China's other main social media platform.

Ahead of the strike, some banks - including Citigroup and UBS Group - told local employees it was possible to arrange flexible working arrangements as protests continued. It's the last of consecutive demonstrations that began with a "flash mob" by financial professionals on Thursday.

While some commuters shouted expletives at the protesters on Monday, many also expressed sympathy with the cause.

"I am fine with the disruptions though I don't think the government cares as much," said Peter Lee, who works for a brokerage, after he failed to get a train from Sham Shui Po station and instead hopped a 30 minute bus ride to the Star Ferry. "The strikes will have little impact to force the government to make moves, but I am still supportive." BLOOMBERG

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