After almost 10 weeks of protests, Occupy Hong Kong is coming to an end. Having failed to halt the protests using other means, Beijing has sought to underline the economic damage to Hong Kong caused by the protests. But there is minimal evidence that Hong Kong’s economy has suffered, or will suffer from Occupy movement.
There are two aspects to Beijing’s rhetoric on the Occupy Hong Kong movement: the direct financial impact of the protests and the reputational damage Hong Kong has suffered as a result of them. Known around the world as an international financial hub and a stepping stone into the growing Chinese market, these arguments have found resounding strength across the board. The latest polls show that two-thirds of Hong Kong residents want the sit-ins to end.
The anti-Occupy camp highlighted these issues in the months leading up to the protests gathering strong support from international financial institutions such as Barclays and HSBC. They both released reports in July 2014 underlining the strong negative economic effects the Occupy protests would bring to Hong Kong. Beijing has now latched onto the claim using the mainland press to spearhead the campaign. This is a marked shift from earlier in October when the People’s Daily blamed ‘foreign forces’ for instigating the movement.
China has backed its rhetoric with strong support from the local and international business elites in Hong Kong. Lee Shau-kee, chairman of Henderson Land Development, criticised the Occupy movement as, ‘an act of destruction that not only posed adverse impact on Hong Kong’s economy, finance and social prosperity but also harmed its international reputation.’
While Hong Kong business elites are closely tied to the Chinese government and state-owned enterprises, international business institutions have backed Beijing’s claims for fear of losing important business on the Mainland. For example, British banks including Barclays hold over $190 million of outstanding loans to Chinese companies and are therefore doing everything to stay in Beijing’s good books.
But Beijing’s preaching of ‘Economic Armageddon’ has been inconsistent. John Tsang, Hong Kong’s Financial Secretary admitted, ‘Hong Kong’s economic conditions and financial markets have remained stable despite the Occupy movement.’ Regardless of earlier fears, the planned connection between the Hong Kong and Shanghai Stock Exchanges proceeded despite the protests. Although the project was slightly delayed, this could be put down to a range of factors including the APEC meeting in Beijing.
In fact, most statistics analysing Hong Kong’s economy indicate that the opposite of a financial crash is taking place. Despite the Occupy Movement, the stock market has done resoundingly well, outperforming every developing country’s in October. The Hang Sang index fell 3.4% in the second day of the Occupy protests seemingly vindicating the anti-Occupy camp. However, by the end of October the MSCI Hong Kong Index rose 3.1%, effectively cancelling any negative effects first brought on by the Occupy movement. The World Bank’s annual report also continued to rate Hong Kong as the top three economies in the world to do business in.
Even the tourism sector which was believed to have suffered disproportionately from the protests has been unaffected. Fear struck Hong Kong’s tourism and retail industry when Beijing stopped issuing group tour visas to mainland tourists during the first week of October.
However, this turned out to be a temporary measure, which was never officially put on paper. Group tours from the Mainland were up 90% compared to the same period last year. Property developers have also pointed out that shopping malls catering to mainland tourists have been unaffected despite weeks of protests with sales remaining stable.
Beijing’s argument has certainly had an adverse effect on the support for the demonstrations. But any economic difficulties faced by Hong Kong also need to be placed into the context of China’s slowing economic growth and Xi Jinping’s anti-corruption drive.
For example, Hong Kong’s retail sector had seen dwindling profits for seven consecutive months before the Occupy protests broke out. In other parts of the city unaffected by the movement, it is business as usual. And there are no signs that investors are shifting future investment plans away from Hong Kong.
While many ordinary citizens decry the daily inconveniences of the protests, Beijing’s economic card has given them a legitimate way of framing their aversion to it. The biggest effect the Occupy movement has had is not economic, but rather social. Whether the protests politically change anything remains to be seen, but socially, the protests have turned the old way of thinking on its head. In that respect, business as usual will never be the same.
