Commentary: Hong Kong protests may have crossed the point of no return
The Hong Kong protesters that bashed through the Legislative Council building may have spooked investors, but they aren't likely to back down anytime soon, says Tom McGregor.
BEIJING: Protesters ransacked Hong Kong’s Legislative Council building this week, after protests in the vicinity on the occasion of the 22nd anniversary of Jul 1, Hong Kong’s return to China, got out of hand.
Pictures of smashed windows, defaced walls and destroyed property filled headline news around the world.
Supporters say these actions are reflective of the desperation disenfranchised Hong Kongers feel, with their backs against the wall and little to lose.
READ: Behind Hong Kong’s extradition bill protests – a looming divide, growing pessimism about the future, a commentary
But there are others who also feel that defiling one of the city’s most sacred political institutions in such a shocking manner has crossed a red line, and is likely to embolden violent elements within the demonstrators to resort to other hardline tactics in the name of democracy, something which they do not support.
These moderates fear not only how uncontrollable the movement might become, but also the effects of this month’s turmoil on the city’s reputation, which may have implications on their livelihoods and the economy, which is only just reeling from the ongoing US-China trade war.
For decades, Hong Kong has been seen as a sure-fire bet for foreign direct investments. Its pole position as the region’s financial hub was solid.
A shining sector in this Pearl of the Orient was property – which mirrored the boom in the stock market and exuberance in business sentiments.
But the confrontation between Hong Kong authorities and protesters, sparked off by the extradition bill, continued episodically since early June, and now prolonged after an opportunistic protest gained traction on Monday, has spooked investors, who traditionally place a premium on political stability and strength of authorities to make long-term investments.
This latest storming of the LegCo building has brought into sharp focus the city’s heightened political risk and stoked business uncertainty.
It has struck at the heart of Hong Kong, and raised questions about whether the city might lose its appeal as Asia’s top financial centre.
SAFER BETS ELSEWHERE, DELAYS TO REDEVELOPMENT PLANS
A look at the property sector is revealing. Some companies with offices in Hong Kong have concluded that locating their Asia-Pacific arm elsewhere might be a safer bet, with some wealth managers reportedly looking to alternatives like Singapore. Singapore property brokers have reported more queries and visits from Hong Kong-based companies.
For one, the Lion City also offers more competitive rents. According to a report published by Knight Frank, in the first quarter of 2019, monthly office rent in prime locations for Singapore stood at US$81.2 per square metre (psm), a figure that was US$221.5 psm in Hong Kong
The brewing uncertainty may also impact larger business calculations. The lacklustre economy has seen gloomier days over the last month.
A bold vision to develop the former Hong Kong Kai Tak airport site into a major business hub in Kowloon has been put on hold in mid-June, as developer Goldin Financial Holdings rescinded its bid for a US$1.2 billion site there, citing economic instability and “social contradiction”. Knight Frank subsequently lowered its estimates on the remaining parcels by 5 per cent.
Such developments threaten to delay plans to transform Kai Tak, along with Kowloon Bay and Kwun Tong, into the city’s second core central business district.
SIREN CALL FOR DEMOCRACY
Protest leaders have not expressed remorse over the recent violence. Joshua Wong, a Hong Kong pro-democracy leader, never apologised for those who barged in and defaced LegCo, claimimg it was just a siren call for democracy. He said:
I hope people are aware that lawmakers in Hong Kong are not all democratically elected ... Instead of criticism or blame [on the protesters], they should have more understanding on the crackdown on human rights and that we have not achieved our goal.
Some who support the protests say going on strike from work, blocking roads, encouraging the shuttering of stores and hurting the economy is precisely their intent – a new weapon in their arsenal to change the Hong Kong administration’s calculus in their fight for political autonomy.
Among the places closed during the protests in June include high-end brands like Apple, Chanel, SK-II, and more at the International Financial Centre in Central.
In other words, Hong Kong executive Carrie Lam and Hong Kong leadership could strike down plans for the extradition bill and promise never to make it law, but activists may just keep up protests.
THE POINT OF NO RETURN
Yet ordinary Hong Kong residents are feeling the fall-out from these protests. Earlier in June, some public services had to suspend activities for a few days and local businesses had to close, which resulted in millions of lost revenue.
Of all the stories, one that stood out was that of 72-year old self-employed taxi driver Wong Po-keung who told the South China Morning Post that he had lost about one-third of his business on Jun 12 as a result of the protests.
“Protestors should consider our livelihood by not blocking the road,” he said.
Indeed, they should consider the impact of their actions on Hong Kong residents striving to make a living. What happens next lies in their hands. Until they cease these protests, the Hong Kong administration has no way out.
But after seeing how demonstrations have successfully forced the Hong Kong administration's hand to postpone the extradition bill, the protesters now smell blood and are unlikely to back down.
Tom McGregor is a commentator on Asia-Pacific affairs based in Beijing.