ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintIcon Twitter
Hong Kong protests

Hong Kong's economic growth under fire from ongoing clashes

Spiraling violence threatens city's status as tourism and finance hub

Protesters block off a road in Hong Kong,  Aug. 4. Some 150,000 people participated in demonstrations Sunday.   © Reuters

HONG KONG -- Protests that began here against an extradition bill are turning increasingly violent, a result of a cycle of growing distrust as the police ramp up their crackdown, prompting protesters to fight back.

Some 150,000 people participated in demonstrations Sunday in the New Territories, one of the city's main areas, according to the organizers. Afterward, some young people broke windows in a police building by throwing bricks, and the police fired tear gas to disperse them. Some of the protesters then moved to Causeway Bay, a shopping district popular with tourists, and occupied the streets, leading to violent clashes with the police.

The previous day, protesters threw a Chinese flag into the ocean and burned cardboard in front of a police building. At least 20 people were arrested, bringing the total number arrested since June past 200. And there are calls for a general strike on Monday.

Beijing has been taking an increasingly forceful stance. A spokesperson for China's Hong Kong and Macao Affairs Office strongly criticized the treatment of the flag.

"Their conduct has blatantly offended the state and national dignity, wantonly trampled on the bottom line of the 'one country, two systems' principle, and greatly hurt the feelings of the entire Chinese people, including Hong Kong compatriots," said the spokesperson.

The violent turn and protracted protests are casting a shadow over Hong Kong's status as a major financial center. Economic growth in the city has sunk to a 10-year low as a result of the U.S.-China trade war, and tourism and consumer spending are certain to take a hit from the protests.

"Eight consecutive weeks of mass protests since early June have already brought immediate disruption to inbound tourist arrivals, retails sales and the property market," said Bank of America Merrill Lynch.

"We expect to see more evidence of adverse impact in 3Q," the bank added, downgrading its forecast for Hong Kong's 2019 gross domestic product growth to 0.8% from 2.2%.

"The unrest and apparent rising distrust in government runs the risk of damaging business confidence and eroding the quality and effectiveness of governance, which supports Hong Kong's three-notch positive sovereign rating differential with mainland China," warned Fitch Ratings.

Beijing has not ruled out the possibility of deploying the People's Liberation Army to deal with the situation in Hong Kong.

"Some international investors may, in time, eschew Hong Kong, perhaps preferring Singapore as a regional center," said Steve Vickers, CEO of political and corporate risk consultancy Steve Vickers and Associates.

The Hong Kong government has essentially abandoned efforts to pass the extradition bill that would have allowed Hong Kong residents to be handed over to the mainland, so the protesters are now expressing their anger toward the police and Chinese government. One of the top priorities for the protesters is the establishment of an independent committee to investigate police brutality. Almost 80% of Hong Kong residents, including those not participating in the demonstrations, are in favor of this proposal, according to a survey.

The violent protests are led by young people supporting activist Edward Leung Tin-kei, a proponent of Hong Kong independence from China. But many Hong Kong residents and pro-democracy activists accept the "one country, two systems" framework and do not support independence. Initially, many experts believed that if violent protests were to continue, the movement would lose momentum as public support waned. But weekend demonstrations are still drawing more than 100,000 people each week.

"I don't agree with violence, but the government and Hong Kong police force the protesters to do that," said a 36-year-old woman who participated in Sunday's demonstrations.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Try 1 month for $0.99

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends January 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to Nikkei Asia has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more