Reality bites with cold economic facts

Editorial | Mary Ma 11 Jul 2019

Following weeks of demonstrations involving many thousands of people, it's probable for the worst protests ever to hit Hong Kong fizzling out in the coming weeks - that's if the administration doesn't commit another serious error in political judgment.

Curiously, there seemed to be less traffic in the Central business district when I passed through the area yesterday afternoon. Are company executives leaving early for summer holidays to keep their children away from the extradition-bill heat?

While official figures won't be available for a while, it's clear the volatile situation is having an impact on local business activities. I understand that a major sales event for customers from the mainland has been cancelled due to the instability, costing the organizer tens of millions of dollars in potential revenue.

Since the release of official statistics is often behind the curve, I wish that by the time those setbacks are confirmed, the tense situation would have already eased sufficiently and cease to be a major concern for the economy.

However, this might be wishful thinking. While I hope not, I also wish that by that time, the government would have successfully opened a dialogue with the young people and protesters, and come up with some concrete measures to address their outstanding grievances.

Were that the case, the SAR would be able to concentrate on protecting itself against the impact of the Sino-US trade war. Otherwise, Financial Secretary Paul Chan Mo-po will have to lower his economic forecast yet again.

So, how will things develop from this point onward? Although I don't have the crystal ball to predict the future, I'm certain that another error in judgment by either side - the establishment and non-establishment - will bode gravely ill for the city.

On Tuesday, the City University of Hong Kong published its latest consumer confidence index for the second quarter, revealing the confidence level has dipped to a five-year low. Compared to the same period a year ago, it was nearly 24 percent lower.

While low confidence in economic development and housing were blamed, political instability was also cited.

That's a troubling finding. Since the survey was conducted in May and June, the protests hadn't yet taken place when many of the 1,005 respondents were polled. Therefore, the findings don't even reflect the latest events.

I have no doubt that had the survey been conducted now, the index would have plunged even lower.

Meanwhile, a leader of the Chinese Manufacturers' Association of Hong Kong cautioned that politics has been increasingly a factor affecting Hong Kong's economy. The warning by David Wong Yau-kar was timely because our economy has already been suffering from the impacts of the trade war, and internal disagreements over the bill would hurt the economy further.

It's only to be expected that if the row isn't resolved, fewer mainlanders would come to the SAR, which will hit the local retail sector directly.

It's all about jobs.

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