The streets of Hong Kong is flooded with over 2 million protesters and as threats are now being thrown out from Beijing, the US has instituted a travel warning for US citizens. Now that the protests have spilled over into neighborhoods that are located outside the allowed areas by the police, there is an increasing voice from the Hong Kong government warning of a military intervention. Note that sometimes these street protests have been violent. The protests pose the biggest challenge to Chinese President Xi since he came to power in 2012.
The challenge for Hong Kong Leader Carrie Lam has been daunting as she visited the local polica station that was attacked by protesters last week. She stated that the government would help the local population with support to increase their standard of living. Police have arrested 589 people since the protests began in June with the youngest protester aged 13-years old. Many of those arrested have been charged with rioting, this carries a 10-year sentence in Hong Kong. But the protesters have been welcoming to tourists, stating that they apologize for the current conditions in the city, and ask for understanding.
Our View: Note that Hong Kong is the biggest financial hub in Asia and these ongoing protests, along with the US-China trade war are two reasons that trading can be disrupted and of course will add some pressure to the stock market. Still, the citizens of HK have strong and very independent political ideas that must be expressed.