It has been nearly four months since the Hong Kong government introduced in the Legislative Council a
bill to amend the fugitive offenders and mutual legal assistance laws. There was considerable debate about the extradition bill, as it was commonly known, over the following two months – including some strong
opposition. Then, in early to mid-June, several
major street demonstrations took place.
The government shelved the bill – later making it clear that it was
dead. Top officials also accepted that they had been out of touch with public opinion, and declared that they would listen to a broader range of views in future.
The last two months have brought a series of shocking events. We have had blockades of
police headquarters and government offices, the
break-in and vandalism of the Legislative Council building, and battles in a
Sha Tin shopping mall and elsewhere.
Over the last few weeks, the situation seems to have become worse. Demonstrators attacked the central government’s
liaison office in Sai Ying Pun, defacing the national emblem above the entranceway, while thugs attacked bystanders in
Yuen Long MTR station – both of which were totally unacceptable. Last weekend’s demonstrations in Yuen Long and Sheung Wan were
unauthorised but proceeded anyway, leading to yet
more violence.
This series of escalating events looks like a spiral in which clashes between protesters and police will only become more severe. There is increasingly a sense that Hong Kong is in crisis. This feeling is pervading the community, especially among residents of areas affected by the unrest. Civil servants and especially the police feel
demoralised and are under great pressure.
The fear that Hong Kong is in danger of slipping into greater chaos is starting to shake confidence among the business community.
Our stock market is not usually affected a great deal by local politics. But its drop on Monday morning and rebound that afternoon – after the central government’s
press conference on Hong Kong – reflect jitters about local stability. You may feel we should not be worrying about the stock market index at a time like this, but these price movements are sending a signal to us. The stocks that fell most sharply were those in domestic sectors like property, retail, tourism, dining and so on. Investors are saying they see worsening prospects for these companies – in other words, the
local economy.
Chambers of commerce are sending a similar message. After polling their member companies – including major local and international companies – they are warning of deteriorating confidence and a rising perception of risk. They are especially
worried about Hong Kong’s international image as a stable and safe place to do business. It is hard to rebuild a good reputation after it is damaged.
My own experience – and that of personal contacts of mine – substantiates these worries.
Just a few days ago, someone asked me if it made sense, given the situation, to move their trading business out of Hong Kong. I have also heard people talking about moving their families out of Hong Kong – and we have all read reports about investors thinking about relocating assets and funds to other financial centres because of the unrest.
As the business chambers have noted, the clashes between protesters and police are being widely broadcast overseas. Overseas visitors are also coming into direct contact with the chaos breaking out on the streets.
Protests targeting
tourist districts, the West Kowloon high speed rail terminus and the
airport, have largely been peaceful. But in some cases – in Sheung Wan, for example – visitors have been caught up in conflicts outside hotels. News of these incidents can spread quickly, and there are already signs that
tourist arrivals might fall because of the trouble.
I know some people think fewer tourists might be a good thing. But fears of instability affect local residents too. Restaurants, shops and other businesses aimed at local consumers are also reporting slower business as people stay at home.
All these should be a concern. Investor sentiment and corporate fears about Hong Kong’s international image do not just concern financial analysts or the business press. These things ultimately affect every person in Hong Kong. They affect jobs, incomes, families’ living standards and children’s future prospects.
In short, the sooner we can create a calmer atmosphere, the more we will all benefit.
Bernard Chan is convenor of Hong Kong’s Executive Council
