Hong Kong’s Crisis Crushes Its Economy

BusinessHong Kong's Crisis Crushes Its Economy

Hong Kong’s Crisis Crushes Its Economy

While Hong Kong is undergoing the most unprecedented crisis it has ever lived since the nineties, its economy might take a toll. Tourism has sharply dropped, airports traffic has drastically slowed down, while malls and shopping centers are nearly empty. 
While Hong Kong stocks are “flat”, according to many analysts, Cathay Pacific has started to lay off its staff who would attend demonstrations.
In the meantime, the city-state seems to be living a complete shutdown, while tear gas and police violence have turned Hong Kong’s main streets into a riot zone. 

Cathay: a “good student” gone bad

Hong Kong main airline might be the symbol of Hong Kongs declining economy. As a result of the crisis that opposes pro and anti Bejing demonstrators, Cathay Pacific has asked its staff not to get involved in the pro-democracy movement.

Last Friday, a press release published by the airline specified that crew members should not get into “violent activities”. Earlier this month, a pilot was suspended after he was seen at an anti-government demonstration, as well as two airport employees that were let go for “misconduct”.
As a response, not only main local media suggested to boycott Cathay Airlines, but Cathay’s shares dropped by 4% – closing last Monday to a ten-year low.

Tourism numbers are worrying

Unsurprisingly, the smell and the effects of tear gas seem to have massively repelled tourists. According to the Nikkei Asian Review, Hong Kong’s occupancy rate has dropped by 7% already and is predicted to worsen.
According to the New York Times, more than 100 flights were cancelled only for August 12th.

“Many protesters were angry that a female demonstrator was hit by a projectile in her eye. The statement said the airport’s operations had been “seriously disrupted as a result of the public assembly at the airport today.”, reported the newspaper.

During a news conference last week, officials confirmed that year-on-year tourism drop “widened to 31% in early August”, reports Nikkei Asian Review. At the moment, more than 22 countries are issuing warning advisories for Hong Kong.
MTR, the group operating malls and shopping center, said it was facing its “biggest challenge” since its launch 40 years ago. Its CEO,  Jacob Kam Chak-pui, said during a news conference last Thursday that the “unrest has affected people’s desire to go out, or to consume. The overall economy has been impacted. I am sure there will be an impact on us.”. 

Read on Alvexo: “Star Market, the Nasdaq of China Gained Up to 520%”

Hong Kong’s stocks are flat

Last but not least, the situation of Hong Kong’s market is bad as well. As experts said, the Hong Kong crisis only added a layer of complexity while the local market was already slowed down by the trade war between China and the United States.