Hong Kong's pro-democracy protests and the impact on its economy

Hong Kong's pro-democracy protests and the impact on its economy
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Video transcript:

Are the protests having a negative impact on Hong Kong’s economy and prosperity?

Joseph Dobbs, Researcher at the European Leadership Network:

Well, I think there’s been a great deal of fear-mongering with regards to this question, particularly in the mainland press which has been repeatedly saying that these protests are going to impact on Hong Kong’s economy, its stability, its prosperity. And I think this has largely been in an effort to sway what people call the ‘silent majority’ in Hong Kong, with the idea that public opinion sways against the protesters, who have been enjoying quite a lot of positive opinion in Hong Kong – particularly after they were tear gassed by the police on Sunday [September 28].

I think that the statistics don’t really back this up. Yes, with regards to tourism there will be some effects. Just having this many protesters out in the streets blocking transport links and access to shops is going to have an impact. And lost days at work as well, as people spend the nights on the street protesting.

Hong Kong’s retail and tourism sector accounts for 10 per cent of its economy, so this is not to say that the impact won’t be in some way significant. But one tourism company in particular has stated that it only noticed a seven per cent drop in the number of tourists coming from the mainland on China National Day. Now, a seven per cent drop is not that significant I think, and there has been no notable decrease in the number of tourists coming from elsewhere in the world. I imagine a number of people will have cancelled their trips, but largely speaking, if these protests die down – which is not necessarily certain – the tourism sector will regain its previous position. And the retail sector will as well.

I don’t think we’re going to see a situation where mainlanders are going to stop wanting to come to Hong Kong to buy their luxury goods. I think the main discussion of the Hong Kong protests have been blocked in the mainland. I don’t think we’ll see a discernible impact in that respect.

Is it likely that Beijing will make concessions to the protesters demands?

Joseph Dobbs:

Well, I think with regards to whether Beijing will make concessions, I don’t think the protesters should be too optimistic. To be honest I don’t think many of them are naïve enough to think that Beijing will back down. As CY Leung, the Chief Executive, himself mentioned in his press conference on Thursday [October 2, 2014] they are very rational people.

I think if you look at the discourse amongst the protesters a lot of them have moved from early in the protests to talking about universal suffrage and issues pertaining to the Chinese Communist Party. But then they moved more onto domestic issues, and I think they will now be looking towards a more domestic solution to these problems, partly because it’s so unlikely that Beijing will back down.

Xi Jinping, the Chinese President, has been on a roll of late - getting rid of an awful lot of corrupt officials, as they have been called in the Chinese press. I think that he’s an incredibly strong leader and he wouldn’t want to come across as weak with regard to Hong Kong.

The mainland have buckled before to Hong Kong’s demands. Back in 2003 when thousands of people took to the streets to protest the controversial Article 23, which was an anti-subversion law. The mainland government backed down, as did the Hong Kong government back then.

But I think the one thing that will be on the minds of the Chinese leadership will be Taiwan. The ‘One Country Two Systems’ framework was originally deemed a possible solution to the One China issue, however it has lost its appeal in Taipai of late - particularly since the protest started. Taiwan President Ma Ying-jeou has said the One Country Two Systems will never really work for Taiwan.

But he’s also made it very clear that relations between Taiwan and the mainland – which are of utmost importance to Beijing – will be negatively impacted if the Hong Kong protests are ended with force or violence.

(photo: dpa)

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