Protestors took to the street of Hong Kong over the weekend to provide a timely reminder to the government that the situation is far from resolved. Hundreds of thousands of protesters assembled at Victoria Park. By late afternoon, they had brought parts of the city to a standstill as they tried to march to the main financial hub.
The weekend’s protests chalk up the six-month anniversary of the demonstrations. On 9th June, one million protestors took to the streets to oppose government proposals to introduce an extradition bill that would allow Hong Kong citizens to be deported to the Chinese mainland. One week later, the number of protestors topped the two million mark – this in a city that has 7.4 million inhabitants. The number of protestors has fluctuated, and the demonstrations have been associated with varying degrees of violence. Despite not having a designated leader, the groundswell of discontent has continued to drive Hong Kong citizens out onto the streets on a regular basis. There has also been the formation of a ‘crowd-sourced’ agenda, with the protestors crystallising their demands to five issues.
There is, of course, ‘healthy debate’ among the anti-government factions. On Monday, SCMP.com released results of a survey that goes into a granular level of analysis. It found that:
“Some 42% of young Hongkongers surveyed frequently or occasionally argued with their parents over past few months, ‘current affairs’ being the major provocation.”
Source: South China Morning Post
Despite the airing of differences, or maybe because of them, the government has failed in its attempts to divide and conquer. Researcher Christine Chan of the Hong Kong Federation of Youth Groups said at a press briefing on Monday:
“Recent protests have triggered vigorous discussions, arguments, and even conflicts between generations, who hold sharply different values.”
Source: South China Morning Post
The five demands remain as:
1, the bill must be withdrawn
2, the chief executive must resign
3, the government must retract its characterisation of the violent clashes as “riots”
4, there must be a full independent inquiry into the actions of the police and
5, everyone arrested in respect of the clashes must be unconditionally freed
Given that the protestors have very little in the way of an official organisational structure, it’s interesting how the five demands have been held to by the group. The loose amalgamation of anti-government protestors comes from a range of demographic groups who have widely varying motivations. If the government was hoping that the lack of structure would lead to the demands slipping away on their own, then they were very much mistaken. Instead, it is the government of Chief Executive Carrie Lam (see demand number two) that has been cumbersome in its approach. The first demand was conceded in the summer, but the timing was poor. The concession came too late to appease the protestors, who had built momentum by that point, and the administration’s policy has continued in a fashion that is best described as ‘too little, too late.’
The second demand may also be in the pipeline. Lam is due to leave her fixed-term post in 2022, and a premature exit may not be too improbable, as long as it is ‘elegant’ enough for Lam and the Beijing administration that supports her.
According to the most recent figures from the Hong Kong Public Opinion Research Institute, Lam’s approval rating plunged to just 19.7% in November – a shift triggered by the protests, as although she is now the least popular of Hong Kong’s leaders, she was formerly benefiting from approval levels close to 60%.
Accepting demands three, four and five might be a bit too much for the government to swallow. Conceding on all five points would be a substantial and humiliating climbdown, and this is where the lack of an official leader may hinder the anti-government movement and cause the situation to drag on. In the absence of an individual with a hard-nosed but pragmatic approach, the Beijing and Hong Kong administrations are left with the impossible task of negotiating with a crowd.
Unfortunately for the business community, it is the Hong Kong economy that has to date formed the “something” in the statement “something’s got to give.” The city is officially in recession, with the economy contracting 2.9% in Q3. The government itself attributes at least 2.0% of that slump to the protests, and the city’s full-year growth forecast is now set at negative 1.9% for this fiscal year. This is despite the administration introducing four rounds of relief measures worth 25bn Hong Kong dollars ($3.19bn) and the posting of the first budget deficit in 15 years.
Despite the chilling official data, a lot of the business community are able to maintain a brave face.
Edward Yau, Hong Kong’s Secretary for Commerce and Economic Development, was speaking with CNBC when he stressed the ‘business as usual’ mantra:
“We hope that, well with the easing of the social unrest, law and order back to normal. Then I think we’re heading towards a rebound.”
Yau even has time to consider problems other than the city’s financial district being closed down by “rioters.” He continued:
“More importantly, I think we also need to tackle the wider picture, which I think Hong Kong and our neighboring region also suffer, which is U.S.-China trade war.”
While Yau looks overseas for potential geopolitical risks, the rest of the global financial community looks back at him. Hong Kong remains a concern for many and a resolution continues to appear out of reach. The risk remains that mainland China may intervene and with that bring an escalation to the situation that would shock the markets.