Hong Kong is one of the most important business, trade and finance hubs on the planet. When one flies to Hong Kong, the airport is modern and busy with traffic from Europe, North America and Asia. One can hear a dozen different languages while walking through the Hong Kong International Airport and a short distance away, can see massive container and shipping hubs, that transport goods around the world. This is Hong Kong and it is full of energy and traffic of all kinds.
The protests that started 12 weeks ago are now putting this massive hubs of finance and commerce at risk. The most recent concern is the looming recession that is causing some expats to leave and some firms to reduce staff. The technical definition of two consecutive quarters of economic contraction is still kept by many of us in the world of economics and finance, and the third quarter in Japan is bound to confirm this view. The world’s biggest equity deal was set to take place this year in Hong Kong but its launch date, next month, has been put on hold.
One Hong Kong economist has noted that retail sales in Hong Kong could drop 20 to 30 percent this year and it could mean that Hong Kong faces its first recession in a decade. “Hong Kong is facing a crisis unprecedented in its history,” said Edison Lee, equities analyst at Jefferies. In the April-June quarter, when the impact of protests was mild, the economy shrank 0.4% from the previous quarter. Since then, according to an article from Reuters, in the Japan Times, protests have spread across the city and even into the airport, disrupting traffic and paralysing shopping and the movement of tourists.
The Hong Kong recession might be closer than we think……