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Tyranny of minority in Hong Kong takes its toll

Updated: 2014-10-08 07:44
(China Daily)

MUCH HAS BEEN TALKED ABOUT THE PERNICIOUSNESS of the tyranny of the minority in politics. But no other event in the world has ever demonstrated such obvious harm as the "Occupy Central" campaign in Hong Kong does now.

Against the wishes of the majority of Hong Kong, the illegal movement masterminded by a few political hotheads has disrupted the normal operation of the city's major commercial centers.

While the magnitude of working hours and business transactions lost due to the disruptions in the city can hardly be measured in any terms, the impact of days of street confrontations on the stock market is more readily quantified. Initial estimates have put investors' aggregate losses at no less than HK$350 billion.

Retailers have also taken the brunt, with sales in disrupted districts plunging by 30 to 40 percent over the past few days according to initial estimate by the Hong Kong Retail Management Association. It is conceivable that the figures will deteriorate in future weeks, or even months, as more visitors shun the city following a slew of travel warnings by foreign governments.

With the negative impacts on retail sales and tourism - one of the four pillars of the city's economy - rippling through other sectors, the performance of Hong Kong's economy will be seriously affected. Both rating agency Moody's and the World Bank have warned of the negative consequences on the city's near-term economic performance, with the latter now projecting a slower 2014 growth rate than was being forecast earlier.

The medium- and long-term consequences on the city's overall economic well-being could be more serious if disruptive protests continue for a longer period of time.

There have been fears among economists and analysts that Hong Kong's ability to function as an international financial hub could be undermined if the situation gets worse. With regional rivals gearing up to grab a bigger role in the global financial services sector, this is definitely the least desirable scenario for a city that counts financial and professional services as two of its four pillars for economic growth.

While Hong Kong bears the brunt of the negative impact of the city's street politics, the mainland economy could also be affected to some extent in the long-term, given the close economic ties between Hong Kong and the mainland. This is particularly apparent when considering that the city plays the role as a bridge between the mainland and the external world, as well as a testing ground for financial reforms on the mainland.

 

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