Riots hurt hong kong’s economy

Riots hurt hong Kong's economy

Hong kong demonstrations hurt economy of chinese special administrative region. "The ongoing unrest has had a traceable impact on the overall confidence of business people in hong kong," the chief representative of the german chamber of industry and commerce (gmbh) in hong kong, wolfgang niedermark, told dpa.

He pointed to the latest downgrade of the asian economic and financial center’s creditworthiness by international rating agencies fitch and moody’s, which also gave a "negative" outlook for hong kong.

Head of government carrie lam has already compared the damage to the economy with the crisis caused by the outbreak of the serious lung disease sars in 2003 and the global financial crisis in 2008. Number of tourists fell 39.1 percent in august compared to the same month last year – more than at any time since the sars epidemic. Retailers are suffering badly and many hotels are half-empty as the metropolis prepares to celebrate the 16. Weekend rusht with protest actions in wake. Activists again announced "stress tests" for the airport by blocking accesses.

As a hub in the asia-pacific region, hong kong depends heavily on reliable airport infrastructure for tourism, trade and logistics, said AHK representative niedermark. The protests and disruptions at the airport had led to "historically low visitor numbers over the summer and affected hong kong’s status as a safe destination for business travel.". German companies maintain a "cautious but hopeful outlook for hong kong". Problems in sales, operations, transportation, business hours and morale, he said.

While most did not see their businesses severely damaged, companies in the luxury segment or hospitality industry were "severely affected by the ongoing protests," niedermark said. Many had short-term contingency plans in the drawer, planned the 2020 budget more cautiously, adjusted operations and offered their employees options for working at home, niedermark said. "However, none of our member companies have reported any major adjustments to their long-term business strategy."

For four months, hongkongers have been demonstrating against their own government, the communist leadership in peking and its growing influence on the former british crown colony. Free elections are also called for. Since the return to china in 1997, the territory has been governed autonomously under chinese sovereignty according to the principle of "one country, two systems". Unlike people in the people’s republic, hong kongers enjoy rights such as freedom of speech and assembly, but see them increasingly threatened.

Even before the protests, hong kong’s economy was suffering from the U.S. Trade war with china – now economists warn of a recession. Economic growth reached only 0.5 percent in the second quarter compared to the previous year. Financial secretary paul chan also says the unrest has "tarnished hong kong’s image as a safe city and international hub of business, commerce, aviation and finance".

The destruction and obstruction of the transportation network had affected not only the daily lives of hong kong’s seven million people, but also many international conferences, exhibitions and rude events, chan lamented. So the organizers of the hong kong open postponed the international tennis tournament in early october. The musical "matilda" was also moved. "We cannot guarantee the safety and well-being of our international force, which consists of many young children," the organizer announced.

Pointing to retail slumps of more than 50 percent in august, the hongkong retail association urged landlords to halve rents over six months to help businesses through the difficult period. In july, sales had already fallen by 11.4 percent. Chinese travelers in particular, who account for a good three-quarters of tourists, are staying away. In august, the number from the people’s republic fell by 42.3 percent, according to the tourism commission.

The international airport, which has twice been the target of protests and flight cancellations, experienced its worst monthly passenger decline in a decade in august. 12.4 percent fewer travelers in august. "In the past few months, there have been huge challenges at times for airport operations," said airport chief ng chi-kee.

Also citing the "uncertain" situation and peking’s growing influence on hong kong, the london stock market (LSEG) rejected a 33 billion euro purchase offer from the hong kong stock exchange (HKEX). "We question in the long term the sustainability of the position of HKEX as a strategic interface"."


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