You are here
HK protests taking growing toll on city's economy
FRESH train disruptions by Hong Kong protesters on Tuesday show how unrest once confined to weekend marches through downtown streets is spreading across the Asian financial hub and affecting daily life.
Months of increasingly violent protests are also taking a growing toll on the city's economy, weighing on confidence and scaring away tourists from one of the world's most vibrant shopping destinations.
On Tuesday, train services were slowed on the centrally located Island Line and the Kwun Tong Line across Victoria Harbour after black-clad protesters blocked doors and requested emergency assistance during the morning rush. There was yelling and confusion as commuters found themselves stuck in large crowds on subway platforms for the second time in less than a week.
Although rail operator MTR Corp. said trains were resuming their normal schedules as of 11:30am, such problems are expected to spread as protesters try to keep their grievances in the headlines and force a response by the city's China-appointed government.
The incident follows a weekend of rallies that saw a peaceful sit-in at Asia's busiest international airport and sometimes rowdy mass protests that prompted police to fire tear gas in residential areas.
The movement has proved surprisingly resilient more than eight weeks after as many as one million people took to the streets to oppose Chief Executive Carrie Lam's now-suspended proposal to allow extraditions to mainland China.
Authorities in Beijing have so far maintained their support for Ms Lam, who has rejected demands that she resign, formally withdraw the bill and appoint an independent inquiry into the police's use of force.
Protesters argue that they've been driven to guerrilla tactics because the former British colony's unelected government is ignoring historic protests and the police are withholding protest permits and increasing their use of force. Since last month, different groups in the largely leaderless movement have surrounded police headquarters, mobbed government buildings and ransacked the city's legislature.
Such tactics risk alienating the general public and causing further damage to the economy.
Economists say the impact of anti-government protests over the past eight weeks is already worse than in 2014, when a so-called "Umbrella revolution" paralysed the city's financial district for 79 days.
Demonstrations are more spread out across the city this time and violence has been more intense, prompting local and foreign shoppers to avoid certain areas. Stores and even bank branches have been forced to close for prolonged periods.
Many businesses in the port city on the southern Chinese coast are already facing strains from China's economic slowdown and fallout from the year-long Sino-US trade war.
The main retail association has warned members expect a double-digit drop in sales in July and August. The government will release June sales data on Thursday.
"Hong Kong's retail industry will be affected both internally and externally," said Angela Cheng, economist at CMB International Capital Corporation Ltd, adding she had revised her 2019 retail sales forecast to as much as a 10 per cent drop, twice as deep as her previous estimate.
Brokerage CLSA downgraded local jeweller Chow Tai Fook, one of the city's most popular brands with mainland tourists, to 'sell' from 'outperform' on July 23, saying the protests could cause permanent long-term damage.
Luxury group Richemont warned in July that protests hurt its sales, while Swiss watchmaker Swatch said political turbulence contributed to a double-digit decline in sales in Hong Kong, one of its most important markets globally.
Around the Admiralty district, where much of the protests have centered, staff at several restaurants and shops told Reuters on Monday that patrons have dropped by a third from a month earlier.
Tourism, especially from mainland China, has dropped markedly. Britain, Japan, Singapore and others have issued travel alerts.
Hong Kong's Federation of Trade Unions said hotel occupancy rates fell 20 per cent in June year-on-year, and probably 40 per cent in July. BLOOMBERG, REUTERS