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HK leader warns of economic downturn

Updated

By Reuters & AFP

HONG KONG — Hong Kong’s protests are hitting its economy, the city’s leader Carrie Lam said on Friday, echoing warnings from business leaders including powerful local property developers, as about 1,000 mostly young activists occupied the airport arrivals hall.

The airport rally was promoted online with a mock boarding pass reading 'HK to freedom' and 'warm pick-up to guests to HK' (AFP Photo / Anthony WALLACE / MANILA BULLETIN)

The airport rally was promoted online with a mock boarding pass reading ‘HK to freedom’ and ‘warm pick-up to guests to HK’ (AFP Photo / Anthony WALLACE / MANILA BULLETIN)

China, whose rule over the city is being challenged by the protests, meanwhile demanded Hong Kong flag carrier Cathay Pacific Airways suspend staff involved in the demonstrations. One of its pilots was arrested last week.

The pair of warnings — one aimed at residents planning more marches still and the other at a business emblematic of the city’s colonial past — mark a toughening stance by authorities as they grapple with Hong Kong’s deepest crisis in decades.

Flanked by business leaders, Chief Executive Lam told reporters that companies in the Asian financial hub were “very worried” about the economic fallout from the protests, which began in June and have become increasingly violent.

“We have had two months of political dispute,” she said after meeting business representatives and senior officials, warning that a downturn “is coming very quickly”.

“Some people have described it as coming like a tsunami … the economic recovery will take a long time,” Lam said.

What started as an angry response to a now-suspended measure for criminal suspects to be extradited for trial in China has rapidly broadened to encompass calls for more democracy, Lam’s resignation, and even keeping out mainland tourists.

The protests represent a populist challenge to Chinese leader Xi Jinping, just as an escalating trade war between China and the United States also hammers Hong Kong’s economy.

Cathay warning
China’s warning on Cathay, saying crew who engaged in the protests pose a threat to safety and should be suspended from staffing flights to the mainland, follows the pilot’s arrest and tumbling bookings.

Cathay has said it is taking the directive seriously, though when asked about staff participating in protests last week, Chairman John Slosar said the company “wouldn’t dream” of telling staff “what to think about something”.
Dozens of other Hong Kong companies have warned of faltering earnings, while city officials caution daily that the protests are hurting livelihoods and could help trigger a recession.

Lam said the city’s Executive Council would next week resume meetings suspended in mid-June to prepare a policy response that would consider “daring measures.”

“For Hong Kong’s society to recover the foundation is the same (as that of the economy),” she said. “We must stop the widespread violence.”

She urged landlords to ease rents on hard-pressed retailers, but dismissed demands for an inquiry into police behavior at demonstrations.

“I disagree with (establishing) an independent inquiry that targets police work,” she said. “I don’t think we should just sort of make concessions in order to silence the violent protesters.”

In a report from AFP, Lam warned that the economic impact of the unrest threatened to be worse than the 2003 SARS outbreak or the 2008 financial crisis in the financial hub.

“Compared to the economic downturn caused by SARS that we handled previously, even to the (2008) economic crisis, the situation this time is more severe,” she said at an abruptly organized press conference.

“In other words, the economic recovery will take a very long time.”

The private sector and the tourism industry in particular have raised concerns about the economic impact of the ongoing protests on the city, with travel agencies reporting drops of up to 50 percent in group tour bookings and the tourism board warning of double-digit declines in visitor arrivals in the second half of July.

Hong Kong carrier Cathay Pacific has also warned that inbound bookings are down.

Protesters have continued to stage almost daily rallies which have seen increasingly violent confrontations with police, prompting several countries to issue Hong Kong travel warnings for their citizens.

The protests began two months ago over the controversial extradition bill but have morphed into a broader movement demanding democratic reforms.

Lam has refused to cave in to the demands, which include a call for the direct election of the city’s chief executive, currently chosen by Beijing.

“As far as political solution is concerned, I don’t think we should just sort of make concessions in order to silence the violent protesters,” she said.

“We should do what is right for Hong Kong. And at this moment what is right for Hong Kong… is to stop the violence, and to say no to the chaotic situation that Hong Kong has experienced in the last few weeks, so that we can move on.”

‘Let them know the truth’

On Friday, activists staged a sit-in at Hong Kong airport’s arrivals hall and held up signs in Chinese and English condemning police violence.

“No rioters, only tyranny,” the demonstrators chanted as they began a three-day action.

“Save Hong Kong from tyranny and police brutality!” read one sign.

Protesters have staged increasingly inventive rallies across Hong Kong, and brought out supporters ranging from families to lawyers in a bid to show the broad backing for their demands.

But the demonstrations have also increasingly descended into violence, with police firing tear gas and rubber bullets and protesters hurling bricks and bottles.

The airport sit-in is the second time the demonstrators have brought their message to the busy travel hub, hoping to garner support from international arrivals.

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