• Wed
  • Dec 24, 2014
  • Updated: 4:04am
Monitor
PUBLISHED : Tuesday, 25 February, 2014, 12:32am
UPDATED : Tuesday, 25 February, 2014, 12:32am

Who's more damaging, Hong Kong officials or Occupy Central?

Forget scare stories about looming disruption and economic costs from protests, these guys are amateurs compared with government bunglers

Among the grievances aired at Hong Kong's weekend protest against media censorship were complaints that editors have been leaning on local journalists to stress the supposed economic costs of the Occupy Central democracy movement.

I don't know who these editors are, but evidently they know as little about economics as they care about press freedom.

Opponents of Occupy have been warning for months now that the movement will cause economic havoc in Hong Kong.

However, on examination their criticisms of Occupy are vacuous.

If people are concerned about the impact of traffic jams, it is the transport secretary they should be complaining about

The most common scare stories are that Occupy will cause traffic jams, deter tourists, damage Hong Kong's reputation as an international financial centre, scare off investors and make Beijing reluctant to give us more any more handouts from its regulatory goodie jar.

Let's take those one at a time.

First, no matter how numerous, disciplined and ably led, the Occupy protesters cannot hope to achieve the sort of snarl-ups the Hong Kong government manages every day simply by refusing to unify cross-harbour tunnel tolls.

Sure, Occupy might disrupt flows for a few days. But when it comes to causing lengthy and near immobile tail-backs every working day of the year, the city's officials are in a league of their own.

So if people are genuinely concerned about the economic impact of traffic jams, it is the transport secretary they should be complaining about, not the Occupy organisers.

Next, if the Occupy movement really were to deter tourists, it is likely many Hongkongers would be grateful.

In reality, however, the economic impact will be minimal.

The vast majority of the 54 million visitors who came to the city last year did so to go shopping. Some two-thirds of all spending by visitors to Hong Kong takes place in the city's shops. But the stuff they buy is all imported. That means only a relatively small amount of visitors' retail spending - around 20 per cent according to Monitor's 2013 estimate - actually contributes to Hong Kong's economy.

In any case, considering that Hong Kong isn't exactly short of shopping centres and that Occupy couldn't hope to obstruct access to more than a handful even if a blockade were its main objective, the economic effect on Hong Kong from any disruption to tourism is likely to be negligible.

As for damaging Hong Kong's standing as a financial centre, the city's reputation rests on the reliability of its legal system, the credibility of its regulators, the solidity of its institutions, the know-how of its financiers and the freedom of its information flows. None of those will be jeopardised by a few thousand protesters temporarily blocking some streets.

As Monitor pointed out last year, a long history of anarchist protests aimed directly at London's main financial district has done nothing to harm its world-leading status. Hong Kong's bankers have nothing to fear from Occupy except perhaps for a little minor inconvenience.

Next, there is the threat that Occupy could scare off foreign investors. This is ludicrous. Far from relying on foreign investment, Hong Kong is a sizeable net capital exporter.

Sure, in 2012 - the latest year for which figures are available - outside investors pumped HK$544 billion into the city. But that money, plus another HK$100 billion, immediately flowed out again as outward investment. In other words, Hong Kong doesn't depend on inward investment, and needn't worry about frightening investors away.

Then, there is the idea that Hong Kong won't get so many regulatory handouts from Beijing if Occupy goes ahead.

However, the people who preach this message forget that Beijing uses Hong Kong as a trial laboratory for liberalisation, not out of kindness, but in order to advance its own reform agenda. Slowing that process would hurt the mainland far more than Hong Kong.

Finally, it's worth mentioning that the one attempt by a critic to put a possible price ticket on Occupy-related disruption that I've seen came up with a potential cost of HK$1.6 billion.

That might sound like a lot to you or me. But it's peanuts compared with the HK$22 billion budget surplus for the current fiscal year that Financial Secretary John Tsang Chun-wah is expected to announce tomorrow.

That HK$22 billion is money sucked out of Hong Kong's economy by the government's insistence on raising more in revenues than it needs to fund its spending programmes.

So if Hong Kong's editors are really worried about the damage being inflicted on the city's economy, they really ought to be pointing their reporters at the demolition experts in Tamar, rather than the well-meaning amateurs of Occupy Central.

tom.holland@scmp.com

Share

For unlimited access to:

SCMP.com SCMP Tablet Edition SCMP Mobile Edition 10-year news archive
 
 

 

15

This article is now closed to comments

lexishk
Well said
John Adams
Amen
richardg23
Well said sir.
Dao-Phooy
Thank you for debunking the ridiculous comments on the plans by the OC committee which, if it takes place, will be an act of civil disobedience - acts which those in power don't wish to comprehend. Ordinary people acting on principle and willing to face the consequences.
321manu
For the Beijing types and their cronies, fear-mongering is their currency. It's no surprise that they would dream up rapture-style scenarios to try to dissuade people from peaceful protest. It is helpful that Mr. Holland has produced hard numbers to debunk those doom/gloom prognostications. Nothing like cold hard facts to cut through Beijing's smoky haze.
Indeed, Manhattan had their own Occupy protest. I wonder what great damage NYC suffered to her international reputation, financial well-being, and tourism potential.
gracetodd
well...thanks for your explanation!
longpan
Good! Nice to read this.
caractacus
Time for another 1/2 million march to protest about the stink of corruption at the top...
carbonneutralnigel
great points of view...
bsoong
Its not so much about lost in revenue and I'm sure the over-all impact is minimal. I think the bigger issue is what do these protest really achieve. For those who claim that HK is not dependent on China are delusional. The majority of the population in HK has in some way either directly or indirectly benefitted from China. Without the investment inflow from China, think about the impact across day to day businesses: taxis, restaurants, retail etc... Some people think that HK can function independently and will still have a robust tourism industry to support it. That might have been the case 30 years ago when it was the only multi-national teir 1 hub in Asia. Nowadays tourist can opp for Singapore, Malaysia, Shanghai and many other cities. Times have changed and those supporting Occupy Central need to move on.

Pages

 
 
 
 
 

Login

SCMP.com Account

or