HK enters recession as protests continue, Latest Business News - The New Paper

HK enters recession as protests continue

This article is more than 12 months old

Clashes have led to dwindling tourists and shops forced to close for days

HONG KONG: Hong Kong has fallen into recession, hit by months of anti-government protests that erupted again in flames at the weekend, and is unlikely to achieve any growth this year, the city's Financial Secretary said.

Black-clad and masked demonstrators set fire to shops and hurled petrol bombs at police on Sunday following a now-familiar pattern, with police responding with tear gas, water cannon and rubber bullets.

TV footage showed protesters, who streamed into the Kowloon hotel and shopping artery of Nathan Road on Sunday, setting fire to street barricades and squirting petrol from plastic bottles on to fires at subway entrances amid running battles with police.

"The blow (from the protests) to our economy is comprehensive," Mr Paul Chan said in a blog post, adding that a preliminary estimate for third-quarter GDP on Thursday would show two successive quarters of contraction - the technical definition of a recession.

He also said it would be "extremely difficult" to achieve the government's pre-protest forecast of 0 to 1 per cent annual economic growth.

Protesters have routinely torched store fronts and businesses including banks, particularly those owned by mainland Chinese companies and vandalised the city's MTR Corp metro which has shut down services to stop protesters gathering.

The MTR has closed early for the past few weeks and said it was again shutting down two hours early yesterday to repair damage.


Protesters are angry about what they view as increasing interference by Beijing in Hong Kong, which returned to Chinese rule in 1997 under a "one country, two systems" formula intended to guarantee freedoms not seen on the mainland.

China denies meddling. It has accused foreign governments, including the United States and Britain, of stirring up trouble.

Tourists numbers have plummeted, with visitor numbers down nearly 50 per cent this month, a decline Mr Chan called an "emergency".

Retail operators, from prime shopping malls to family-run businesses, have been forced to close for multiple days over the past few months.

While authorities have announced measures to support local small and medium-sized enterprises, Mr Chan said the measures could only "slightly reduce the pressure".

"Let citizens return to normal life, let industry and commerce operate normally, and create more space for rational dialogue," he wrote. - REUTERS