The Hong Kong economy is in fact only a small part of the overall economy in China, about 2 percent according to Beijing. However, the amount of negative news it generates is astounding. Protests in the city were initially triggered by a change in a law that allowed extradition to mainland China – arrested in Hong Kong, sent to Beijing for trial was the plan. However, the people of Hong Kong protested and at times initiated violence. Now the economy is in its weakest state in over a decade as commerce is fading and some companies are finding it challenging to do daily work.
Q1 2019 GDP was 0.6% expansion, while Q2 fell to 0.4% and Q3 down to negative 2.9%. The growing fear is that some US and European firms will start to leave – no exodus yet – but leave for Singapore and Tokyo or perhaps other cities in the region to establish new offices. But to be fair, Beijing has been patient with these protesters as they have waited and asked for discussions and not come down with a heavy hand. We encourage both sides to sit down and talk with a peaceful solution in as the goal.