After several months of ongoing, gradually increasing in scope protests, Hong Kong is now officially on the verge of an economic recession.
In the previous quarter of 2019 the economy of Hong Kong decreased by 0.4%. At the time, the protests were still in their early stages and tensions had not escalated as much as they have these days. However, now investors are certain that when data about the current quarter is published, it will confirm a second consecutive decrease in growth, which officially puts Hong Kong in a state of recession.
Hong Kong is one of the most important financial hubs in the world, not just in Asia. As a semi-independent Chinese territory, it is an attractive location for both business and tourism, and its stock market is among the most closely watched. Nevertheless, the massive protests have blocked streets, stations, and even the airport over the past few months. Businesses are struggling and tourism is halting. According to preliminary reports, retail sales have suffered a blow of 20-30%.
Moreover, the increased threat of China taking military action is additionally putting Hong Kong’s future in question. The city-state is semi-autonomous, with its own jurisdiction. Earlier this year the government proposed a controversial bill that could give China more meddling power and possibly take away Hong Kong’s independence, which is what inspired the protests. Now China has increased its military presence on the border. People are afraid that if the protests don’t stop soon, China might actually seize control of Hong Kong.
