After Hong Kong chief executive Carrie Lam made remarks on Tuesday that indicated she might invoke a law that would give her broad emergency powers to deal with the protest movement, arguments about whether such a move would save, or destroy, Hong Kong’s economy have boiled across the island and among international observers.
Lam on Tuesday avoided direct questions on if she would use Hong Kong’s Emergency Regulations Ordinance (ERO), which would establish conditions very close to martial law. This was widely interpreted as evidence she is considering such a move, especially since the rest of her remarks amounted to refusing every key demand made by the protest movement, even as she insisted she was willing to have a “dialogue” with its leaders.
China’s state-run Global Times on Wednesday found support from Hong Kong’s service industry for declaring a state of emergency so that daily business could resume and the economy would stabilize. According to the Global Times:
Representatives from sectors such as tourism, catering and transportation, launched the “I want to eat” campaign outside the government complex on Tuesday afternoon, calling for the government to stop violence, restore order and rebuild the economy in Hong Kong as soon as possible.
They also sent a letter to Hong Kong Chief Executive Carrie Lam Cheng Yuet-ngor, claiming the social unrest of nearly three months has led to unemployment, “we, as ordinary Hong Kong residents, still firmly believe in ‘one country, two systems,’ but excessive freedom has become the hotbed for secessionism.
“Secessionists fight against the government with offensive weapons, if we continue to tolerate it, Hongkongers will have no way to make a living,” the letter said.
Dicky Yip, deputy director of the Federation of Hong Kong & Kowloon Labor Unions who participated in the campaign, told the Global Times that 90 percent of tour guides in his travel agency earn zero salary and many vehicles were just “sitting idle in the sun.”
A hotel room, which used to cost HK$1,000 per night can now be booked for only HK$100. The travel agency has not had a single group booking for September so far. Yip calculated that around 240,000 people in the tourism sector have been affected.
That prompted Yip and his colleagues to appeal to the government on Tuesday that tourism workers need to work so that they have money for food. He also hopes that the chief executive can exercise her right and be tougher on restoring peace in Hong Kong.
Hong Kong Secretary for Commerce and Economic Development Edward Yau said using the ERO would not damage Hong Kong’s international trade status.
“From a trade perspective, without a stable and peaceful environment, any economic activity would be affected,” he argued.
On the other side of the argument, the South China Morning Post quoted opposition lawmaker Felix Chung Kwok-Pan warning that Lam would drive vital foreign businesses out of Hong Kong by invoking emergency powers. According to the South China Morning Post:
“When you introduce laws we are not familiar with, there may be an evacuation of foreign nationals and the withdrawal of investment,” Chung said.
The ordinance, last used during the 1967 riots, would give the chief executive the power to “make any regulations whatsoever which he [or she] may consider desirable in the public interest”, if they considered it an occasion of “emergency or public danger”.
[…] Chung said he hoped the government was just trying to see how people reacted to the suggestion, and added that officials should cope with the problem in a way that would have public support.
“When you only use suppressive methods to handle something, it doesn’t solve the problem at all,” he said.
On the same program, the Democratic Party’s James To Kun-sun said it would not be proportional to use the ordinance to tackle the present political crisis.
“Politicians should consider political solutions,” he said.
Nikkei Asian Review reported on Wednesday that Hong Kong’s economy has been damaged by 80 days of protests, saying:
Hong Kong’s stock market has been hit particularly hard. After leading the world in initial public offerings during 2018, the exchange has hosted only one debut so far in August. The city could fall to a six-year low in 2019, according to financial information company Shanghai DZH.
Anheuser-Busch InBev’s Asia unit decided in July to halt a planned Hong Kong IPO, following a similar move in June by logistics property developer ESR Cayman. The benchmark Hang Seng Index has fallen 8% this month alone.
Chinese e-commerce giant Alibaba Group Holding now looks to delay an expected August debut in Hong Kong to autumn or later as Beijing condemns the protests.
“A listing by Alibaba, a quintessential Chinese company, would benefit Hong Kong,” a Shanghai-based think tank said.
Equity financing, an indicator for the level of activity in a capital market, sank in August to less than 20% of the monthly January-July average.
The financial sector has been on edge since protesters stormed Hong Kong International Airport earlier this month, sparking extensive flight cancellations. One brokerage temporarily discouraged staffers from traveling, given the possibility of physical harm.
The number of visitors to Hong Kong halved on the year between Aug. 15 and Aug. 20, the period immediately after the airport resumed operations, the city government said.
The South China Morning Post found the economic impact of the protests magnified by the trade war between the U.S. and China, citing fears that the city’s economy may have already slipped into recession as orders from American customers decline by up to 30 percent. Hong Kong’s exports overall fell by 5.7 percent in July after slipping 3.9 percent during the first half of 2019.