As assorted “Occupy Central” activities continue in Hong Kong, the question has once again arisen: How many of the resources that could bolster the development of Hong Kong are being spoilt by the demonstrators?
The series of political struggles Hong Kong’s Civic Party has organized over the past years, from the cases that sought to challenge the legal interpretation authority of the Standing Committee of the National People’s Congress, China’s top legislature, and created for the region the troublesome problem of the “children” whose parents are both non-Hong Kong residents and the legal dispute involving whether non-Hong Kong helpers should enjoy the right to permanent residency in Hong Kong, which almost led to the addition of 500,000 aliens who do not identify themselves as Chinese to the region, to the inciting of opposition among some local residents against the privatized listing of a commercial mall at a public housing parking lot and the building of the Hong Kong-Zhuhai-Macao Bridge, a key investment project of 70 billion yuan ($11.4 billion) of the central government, have caused enormous economic losses to Hong Kong.
For example, the problem of the “children” whose parents are both non-local residents has brought an extra fiscal, educational and traffic burden to the Hong Kong Special Administrative Region. The forced postponement of the Hong Kong section of the Hong Kong-Zhuhai-Macao Bridge for two years resulted in the construction costs increasing by HK$6.5 billion ($838 million), equivalent to HK$1,000 for every Hong Kong resident or three months rent for all public housing offered by the Hong Kong SAR government.
Given that the latest “Occupy Central” demonstration have culminated in the flagrant violation of relevant national and Hong Kong laws and provocative confrontation against the Chinese central and Hong Kong SAR governments, Hong Kong will inevitably end up paying a higher price the longer it takes to rein in the ongoing political chaos.
The “Occupy Central” turbulence has caused the Hong Kong SAR government to pay some explicit economic costs, ranging from increased expenditure for coping with the turmoil to the losses the tumbling stock market has brought as well as the losses caused to the region’s retail, catering and tourism sectors during the National Day holiday, which is traditionally one of the busiest weeks of the year. According to the estimation of professor Francis T. Lui of the Hong Kong University of Science and Technology, the losses caused to Hong Kong may reach HK$350 billion from the eruption of the “Occupy Central” protests to the end of the National Day holiday on Oct 7. Any escalation of the demonstration will obviously cause even more harm to the SAR’s economic development.
The losses to Hong Kong’s shipping and transportation, two pillar industries for its prosperity, have been particular huge. Since the basic demise of manufacturing in Hong Kong, shipping and transport have held a more prominent status in the region’s real economy and any sufferings caused to the two sectors will deal a heavy blow to the region’s economic development. Considering we are now approaching the peak export period in the run-up to Christmas and the United States and British factors behind the latest “Occupy Central” demonstrations, the relevant forces involved in this plot will not easily move backward and there is much likelihood for them to continue instigating and escalating the chaos in Hong Kong.
More importantly, the lingering political chaos has also brought to Hong Kong enormous latent economic losses, such as the losing of opportunities for young Hong Kong people to make a living or gain greater self-development. At the same time, a chaotic social order will keep international capital away from Hong Kong and thus deprive the region a big factor of promoting its economic development. For instance, the activation of the pan-democrat movement in recent years has caused Hong Kong to witness an actual economic growth rate not only much lower than the Chinese mainland and other emerging Asian markets but much lower than Singapore, its direct competitor in Asia. Considering the helping hand it can receive from the Chinese mainland, the world’s second-largest economy, the largest if calculated according to the purchasing power parity, Hong Kong, as a free port and the mainland’s gateway to the outside world, should have enjoyed a better economic performance than Singapore. Unfortunately, continuing chaos emanating from the “Occupy Central” unrest has produced an opposite result.
Hong Hong’s social turbulence cannot shake the foundation of the mainland’s economic development. Hong Kong’s economic and financial chaos will possibly cause its financial and port status in the world to be replaced by other regions, such as the newly-established Shanghai free trade zone. At the same time, its ongoing chaotic situation, if not changed, will also evaporate some development opportunities for its disgruntled young people.
Mei Xinyu is a researcher at the International Trade and Economic Cooperation Institute, affiliated to the Ministry of Commerce.