Violence dampens HK’s economic outlook
Print Edition
As protracted violence roiled Hong Kong, the Asian financial hub — known as the “Pearl of the Orient” — faces a dimmed economic outlook in the coming months. Calls are mounting among the public for immediate actions to stop violence and restore order.
The demonstrations, which started over planned amendments to Hong Kong’s ordinances concerning fugitive offenders, widened and turned violent over the past two months. Protesters exhibited all manners of blatant destructive activities from blocking railways and tunnels, attacking police, defacing the national emblem and the national flag, to paralyzing the operations of Hong Kong International Airport and brutally assaulting innocent people.
The flagrant violence has already taken a heavy toll on Hong Kong’s already-weak economy.
The Hong Kong Special Administrative Region government revised downward the real economic growth forecast for 2019 as a whole to 0 to 1 percent, from an earlier estimate of 2 to 3 percent. According to Paul Chan, the HKSAR government’s financial secretary, the risk of Hong Kong experiencing an economic downturn is significantly rising in the face of internal and external difficulties.
He said that the recent social incidents have hit retail, restaurants and tourism, worsening economic recession.
Hong Kong’s tourism sector has turned from a summer boom into a chilly winter of unemployment and economic hardship, said Wong Ka-ngai, chairman of the Hong Kong Tour Guides General Union.
A pillar industry for Hong Kong, tourism employed more than 270,000 people, contributed 4.5 percent of GDP to Hong Kong’s economy in 2017. However, Wong said, the impact now is “even worse than during the 2003 SARS outbreak.”
“Many Chinese mainland tourists don’t have the desire to come to Hong Kong anymore. They make up almost 80 percent of our market,” he said.
Since the violent protests began, more than 20 countries and regions have warned their residents against visiting Hong Kong. In the June-July period, average earnings for tourism workers plunged by 74 percent, while the number of tours in Hong Kong fell 74 percent on average, according to a survey of 1,012 people with the union.
“The violence is taking a toll on our life and Hong Kong’s economy,” said Dicky Yip, a tour guide. Yip has made no money over the last two months, leaving his wife as the only breadwinner for the family of six.
The clashes initiated by radical groups have not only disturbed business and commercial order but have frayed Hong Kong residents’ nerves and made lives difficult.
Small and medium-sized businesses account for 98 percent of the total number of Hong Kong businesses and contribute 40 percent of the HKSAR’s employment. Many enterprises have seen a 30 percent drop in business and pay cut for employees in recent months.
In a survey, the American Chamber of Commerce in Hong Kong found that international businesses are already reporting serious consequences, ranging from an immediate hit to revenue caused by disruption to supply chains and consumption, to longer-term doubts over canceled events and shelved investments.
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