It is Hong Kong's biggest question for 2020: when will things return to normal? But it is a trick question. There is now no normal to which the city can return.
The collateral damage from seven months of giant protests drove Hong Kong into recession and made it an outlier among developed economies. While the trade war did not help, lost tourism, flatlining retail sales and cratering business confidence are more about placards and tear gas than U.S. tariffs on China.
Hong Kong expects a 1.3% contraction in gross domestic product this year, the worst in a decade, but even that may prove too optimistic. The International Monetary Fund thinks a 1.9% drop is more like it. That has Financial Secretary Paul Chan hitting the interview circuit to pledge "bold" new spending to stimulate growth.
What is troubling is that Hong Kong is pretending this recession is a typical management challenge. Chief Executive Carrie Lam's government is fooling itself into thinking it can just throw cash at the problem and that, with protesters taking a breather and U.S.-China tensions cooling, recovery cannot be far behind. This is, and will be revealed as, a delusion.
The government is missing the point: when it comes to protests and worsening economic conditions, both reinforce and exacerbate the other. That is why the IMF warned on December 30 that risks to Hong Kong's outlook are still tilted to the downside.
The IMF seems no more impressed than global investors with the $3.2 billion Hong Kong has pumped into the economy in recent months. It funded some tax breaks, one-time utility and fuel subsidies and support for children and the elderly. Alicia Garcia Herrero of French investment bank Natixis speaks for many fellow economists when she characterizes outlays of less than 1% of gross domestic product as "peanuts."
Chan's determination is belied by the city's continued adherence to fiscal probity, which is out of step with the seriousness of this downturn. Last week, he said the budget deficit would not exceed 3% of GDP, with a gap of roughly $10.2 billion, but this will hardly be enough to kick-start the economy.
The IMF thinks Hong Kong will grow 0.2% this year. How does that work with exports down 13 straight months, wages stagnant, inequality worsening and tourist arrivals sliding? In just three months, tour-group traffic from the mainland is down 90%, Jason Wong Chun-tat, chairman of the Travel Industry Council, told the South China Morning Post.
That explains the eerie silence in shopping centers, hotel lobbies and real estate broker offices around the city. Really, which CEOs would be hiring or hiking wages in 2020?
The protest movement, meantime, is far from over. This is partly thanks to worsening inequality, a trigger that remains underappreciated in Hong Kong and Beijing leadership circles. Along with a much bigger dose of government stimulus, the city needs progressive measures to narrow the rich-poor divide.
The problems are structural. There is hope, for example, of Hong Kong offering sizable cash handouts. Fair enough, but it should be using its enviable fiscal space to address chronically high rents in a city fewer and fewer of those under 40 can afford. That means a bolder and exponentially better-funded effort to bring affordable housing online.
If that requires increased corporate taxes, or wealth levies on tycoons, then so be it. Even billionaire Li Ka-shing, who built one of Hong Kong's most dominant business empires, supports the idea of asking the city's oligarchs to contribute more for the greater socioeconomic good. Again, proceeding as if these are normal times, as if Hong Kong is just one fiscal jolt away from renewed health, is delusional.
The government dragging its feet on reforms will give the pro-democracy movement a second wind. If we understood anything from the last seven months, it is that neither Lam nor President Xi Jinping, her boss in Beijing, learned much from Hong Kong's protests. For Lam, 2020 is business as usual. We can say the same for Xi, too, if his decision to send hard-liner Luo Huining to run Beijing's Hong Kong liaison office is any guide.
Sadly, neither have Hong Kong's economic managers learned anything. Chan's team is offering Band-Aids to a city entering 2020 in a free fall.
Things will get worse before they get better. The phase one deal U.S. President Donald Trump and China agreed is merely the calm before the Trumpian storm. Disputes left untouched -- including subsidies for state-owned companies -- will flare up again, and soon. The odds increase as Trump's impeachment troubles have him looking abroad for ways to change the news narrative.
Global events are symptomatic of market chaos to come. Risks include new trade conflicts, market turmoil as Trump provokes the Middle East, Brexit uncertainties, the SARS-like illness gestating in China, you name it.
There is nothing ordinary about this moment for Hong Kong's 7.4 million people or their economic plight. If leaders do not catch on, and soon, 2020's only bull market will be in gas mask sales.
William Pesek is an award-winning Tokyo-based journalist and author of "Japanization: What the World Can Learn from Japan's Lost Decades."