Hong Kong protests put financial business at risk

Hong Kong protests put financial business at risk

Are Hong Kong’s protests necessary to get China and the world to listen to demands for a freer economy and democracy, or will they cause more damage to the city and its financial sector than the protesters can gain in return?

July marks 17 years since Hong Kong became a Chinese Special Administrative Region, and Hong Kong has undergone some major changes in that time. This year, the date that Hong Kong was passed from being a British colony to a Chinese Special Administrative Region was marked by pro-democracy protests in response to China’s increased control over Hong Kong’s elections.

Roughly 500,000 people participated in the pro-democracy rally organized by the Occupy group on the 1st of July through the main financial district, and 1,000 vowed to remain in the city center and occupy a street in the district. Following these threats, 500 people were arrested. Some of those arrested were charged with participating in an unauthorized assembly, as well as obstructing the police.

The main call has been for democracy, in line with universal suffrage. Beijing has agreed to electoral reforms, primarily regarding the election of Hong Kong’s Chief Executive (the highest political position in Hong Kong) by 2017, but is limiting the list of eligible candidates to ensure they are all “patriotic”.  In combination with the strong connection between business and politics, and its intertwined relations with the Chinese Communist Party, this ensures all candidates’ commitment to China and by extension the Chinese economic model.

The official terminology states that Hong Kong and China are “one country, two systems”, but protestors and Chinese administrators seem to have a different opinion on the definition of this terminology. Hong Kong is generally viewed as relatively independent, but China’s meddling is throwing this image into flux. This shift was further confirmed when China urged the United States to stop commenting on Hong Kong’s internal affairs, while stating that “the development of Hong Kong’s political system is China’s internal affair”, as quoted in Xinhua, China’s state news agency.

Increasing disgruntlement throughout Hong Kong will have serious consequences for both parties. Not only is the youth gradually becoming increasingly disillusioned with China and China’s policies, but business could be affected as a result of increasing social unrest and protest.

Various sources have complained that the Occupy movement and its protests are actually likely to cause more economic unrest in Hong Kong than Chinese policies. There are fears that Occupy will cause traffic jams, deter tourists, damage Hong Kong’s reputation as a world-class finance centre, scare off investors and damage relations with Beijing, potentially cutting off hand-outs from the Chinese government.

This is in line with what Hong Kong business tycoon and one of Asia’s wealthiest men, Li Ka-shing, warned of earlier this year. Protests in the financial district risk shutting down business in the financial sector. Spokespeople at the People’s Bank of China have agreed that protests are damaging – and that Hong Kong should appreciate it’s offshore yuan business, which adds up to 53 percent of the world’s share. Business tycoons and those with strong ties to China have denounced the city’s pro-democracy march, reminding Hong Kong of China’s influence and how much China has contributed to Hong Kong’s development as Asia’s main financial sector.

However, these circumstances do not make Hong Kong’s future path clear for its stakeholders – of which there are many throughout the world, especially in the Asian region. With its position in the global financial market, many depend on the booming financial sector and the closely connected real estate sector. The question on everyone’s mind is: Will Hong Kong head more towards a Chinese style economy, or will it satisfy Occupy group members and hold free elections by 2017?

Categories: Asia Pacific, Politics

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