Occupy Central Protest in Hong Kong and its Impact on their Economy
By admin October 7, 2014

Occupy Central

Hong Kong, as the 6th largest stock market in the world and as the 2nd largest in Asia ranked closely after the Tokyo, is now experiencing political turmoil that has a possibility of spreading its influence to the economy of mainland China and those of the whole Asian region. Thousands of people, mainly students, have taken to the streets to protest the Chinese government’s involvement of Hong Kong’s upcoming democratic election.  Occupy Central is a pro-democratic group that promotes civil disobedience and serves as the key force in organizing the protests. Dissatisfaction emerged as Beijing provided a list of “pre-approved” candidates that can run for Hong Kong’s top leadership position in 2017, which is believed, in the eyes of the protestors, to be an erosion of Hong Kong’s democracy.

Since 1997, when Great Britain handed Hong Kong over to the People’s Republic of China, it has been regulated under a “One Country, Two systems” principle, which was introduced by Deng XiaoPing, in the 1980s, aiming at realizing the goal of the country’s reunification.  Under this principle, Hong Kong, as a Special Administrative Region, can maintain its own political, legal, economic, and financial systems, including a democratic system. However, Hong Kong’s democratic system has never been emulated the western standard, even when it was under the rule of Great Britain. Different from other colonies of Great Britain, for the longest time Great Britain never attempted to introduce democracy to Hong Kong until the 1980s, after the beginning of decolonization. After the 1980s, while introducing democracy to Hong Kong, Great Britain continued to appoint British bureaucrats as high rank administrators. Now, Hong Kong’s political system is a complicated combination as people have the rights to vote, protest and assembly, but the rules are bent so that ultimately only the Chinese government approved candidate can win. Media and analysts varied in their opinion towards the protest. While political impact of the protest is not settled yet as negotiations continue this week, negative economic impact is evident.

This turmoil has a ripple effect across the service sector of Hong Kong. The number of mainland tours reduced by 20% in comparison with the same week last year. Countries such as Australia and Italy have issued travel advisories. In response to the decline in demand, hotels in Hong Kong have adjusted room rates down 5% after this past weekend’s protests. The financial sector has been hit by the protest as well. Several banks have closed their branches and asked their employees to only work from home. Stocks fell 1.3%, which reached its lowest level in the past three months. Due to the negative impact on Hong Kong’s economy, investors around the world are carefully watching the situation to make sure that they will not be negatively impacted. As government agreed to have conversation with student leaders of the protest and partly due to exhaustion, the number of protestants has dwindled since this week and many civil servants have returned to their work. Due to the importance of Hong Kong’s economy and political status, it is worth keeping updated with the negotiations that are occurring between the Chinese government, local officials, and protest leaders.

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