It will be a few months before official statistics reveal in concrete terms what impact the recent social unrest has had on Hong Kong’s economy. But what we are hearing from our members, particularly local SMEs and companies in the retail and tourism sector, is that significant damage has already been done.
This is hardly surprising, as the shocking scenes of violence that have been broadcast around the world will have an indelible impact on people’s impressions of the city. The unprecedented number of people who marched without incident to protest against the extradition bill were a great reflection of Hong Kong citizens’ civility, and showed that we are a law-abiding society that treasures our freedoms. Unfortunately, the peaceful actions of these protestors were overshadowed by the few who turned violent.
It is only natural that tourists and businesspeople will delay their planned vacations and meetings until they can be sure calm has returned. Hoteliers and retailers are already anticipating that their occupancy rates and sales will suffer a significant drop as people stay away.
The turmoil is also affecting local Hong Kong people, as atmosphere of unease affects the whole city. People are not in a mood to go out and spend money to enjoy themselves amid such uncertainty.
When calm returns – as we all sincerely hope will happen soon – our fundamentals will still be as strong as ever. But the impact on sentiment will be harder to fix. Hong Kong has a well-earned reputation for being extremely safe, efficient and convenient. Our reputation in all these areas has been hit by the actions of just a few citizens.
Hong Kong is an open economy and a world-famous tourist hotspot. The millions of people who come here every year are a testament to Hong Kong’s success as an attractive global destination. But the other side of the coin is that we are dependent on people coming here, from tourists to investors to global companies.
The city has undergone upheaval in the past decades, including concerns over the impact of the handover, the SARS outbreak and the Asian Financial Crisis. But we have pulled through to emerge stronger than before and we will do so again.
There is no doubt that the recent violence is a major incident on a par with these previous storms. Once the dust settles, we will need to rebuild that confidence – among Hong Kong people as well as overseas investors. But we cannot expect this confidence to return overnight. We in the business community must show unity and support for Hong Kong as we all work together and prepare for the time when the turbulence eases and brighter days emerge.