Hong Kong’s economy shrank 3.2% in the third quarter, after a 0.4% decline in the second quarter, with a further downturn is expected.
Forecasts for the future have been rather grim, with Chief Executive Carrie Lam herself warning for worse things to come. It was also said that the GDP in 2020 for Hong Kong could fall as much as 5.8%.
In response, the government has engaged in relief efforts amounting to $HK 21 Million with hopes of increasing the GDP by 2% next year. This includes methods such as reducing tax, boosting social security and easen mortgage loans for first-timers. However, the government has been hesitant in engaging on wider measures, such as a wide-scale stimulus.
Hong Kong’s main sectors that contribute to the economy such as tourism and logistics have declined. The number of tourists visiting Hong Kong dropped 34.2% recently, which contrasts to the slight rise in the first nine months of this year.
This is due to both the US-China trade war and the current ongoing protests in Hong Kong, with the former being rather uncertain due to Chile’s cancellation to host the APEC meeting where Trump and Xi would meet and the latter is still engulfing Hong Kong despite the withdrawal of the controversial bill. The protests have greatly affected the local economy. As Iris Pang, an expert on the issue, has stated, “When there is violence in the streets, people don’t want to go out shopping or go out for dinner”. Local retailers and small shops saw their business tumble and fall, some have even opted to close their shops altogether.
The protests themselves seem rather unstoppable despite the controversial bill that preceded it in the first place having been withdrawn. The embattled Chief Executive has blamed the protesters as the main problem that caused the economic slowdown. She cited that due to the ongoing protests, the economy will continue to decline even further than the 0 to 1% growth that was initially predicted.
However, she did not directly blame the other issue that has affected Hong Kong, which is the US-China trade war. Instead, she stated that support is necessary from many ‘stakeholders’ to help the government and police overcome the ongoing instability in Hong Kong.
The issue in Hong Kong has been arduous and long for all that is entwined with it, and it has affected the region’s society, economy and even political processes. While one can understand the Hong Kong government’s stance on saving Hong Kong from its limping economy, one could not help but question the government’s commitment to listen to the woes of the protesters. Either way, at this rate the region will only see further turmoil if there are no efforts to truly engage with the protesters and truly listen to their demands.