AsHong Kong pro-democracy protests against the Extradition Bill entered its 11thweek, businesses that are most crucial for the economy of China have warned itof dire consequences if the marches continue.
Topcompanies have raised alarms that the protests, which are often turningviolent, are affecting the future earnings. Not only China, but the economy of Asiaas a whole is at risks due to the massive standoff. Trade to and fro this Asianhub has been jeopardized due to the violence and protests.
ChiefExecutive of Hong Kong Carrie Lam Cheng Yuet-ngor compared the effect ofprotests on the economy to that of a "tsunami". She has also termedit "worse" than the effect of the SARS epidemic of 2003 and globalfinancial crisis in 2008.
Asper a CNBC report, analyst David Roche said China's response to the unrestgoing on in the region will be "linked to what happens to trade talks and internationalrelations globally", adding, that the politics go hand in hand with the Chineseeconomy.
Theprotests which started over an extradition bill, which if enacted would allowlocal authorities to detain and extradite people who are wanted in territoriesthat Hong Kong does not have extradition agreements with, including mainlandChina and Taiwan, have now spilled over issues such as freedom and democracy.
Accordingto official reports, the government of Hong Kong has announced that it haslowered its 2019 GDP growth forecast to 0% to 1%, from the original range of 2%to 3%. Various sectors such as tourism, airline, retail and real estate amongothers have been adversely affected with their sales and earnings declining.
Asper a financial newspaper Nikkei report, "Cathay Pacific Airways CEORupert Hogg speaking to the media on Wednesday said that inbound bookings toHong Kong were down on the year owing in part to the recent protests". Ifsuch circumstance continue, ticket prices had to slashed down which would inreturn affect the revenue.
Thehotel sector had already been suffering pertaining to the US-China Trade warthat these protests added the cherry on top as 22 countries have issued traveladvisories for Hong Kong.Nikkei further reportedthat MTR, which is the city's railways and shopping malls operator, is facingthe "biggest challenge" in providing safe and reliable services inits 40-year history. The report quoted MTR CEO Jacob Kam Chak-pui saying thatthe standstill has affected people's "desire to go out, or to consume,"which has impacted the overall economy and he is sure that there will be animpact on the sector too.
