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More Hong Kong companies say business impacted by mass protests
15-08-2019, 06:39 PM.
Post: #11
RE: More Hong Kong companies say business impacted by mass protests
Economist: Hong Kong’s tycoons ‘are the problem’ underlying recent unrest
* Civil unrest in Hong Kong stems in part from stratospheric housing prices that have locked many residents out of the market, says independent economist Andy Xie.
* Hong Kong property prices have risen over 300% since 2003.
* Beijing needs to stop consulting with property “tycoons” and take away their political power, Xie says.

Huileng Tan

As protests continue to roil Hong Kong, a widely followed economist has an idea about how to ease tensions: China, he said, needs to take power away from the city’s tycoons and fix its property market.

The east Asian financial hub has been rocked by civil unrest in recent months with operations of Hong Kong International Airport severely disrupted this week due to a sit-in by protesters. The ongoing demonstrations in the city started as peaceful rallies against a single proposed law but have snowballed into a wider pro-democracy movement, with some even demanding full autonomy from Beijing amid occasional outbreaks of violence.

Social discontent with stratospheric housing prices is playing a major part in the unrest, Andy Xie, an independent economist, told CNBC’s “Squawk Box” on Wednesday.

“Hong Kong has been a pressure cooker for a long time,” he said.

According to the Centa-City Leading Index, a widely used indicator of the city’s residential price trends, property prices have appreciated over 300% since 2003 when they tanked due to a disease epidemic.

But wages have largely stagnated in the same period, so “it’s very difficult to see how young people can feel hope. They know they’ll never be able to afford a place, so they cannot start a family. How can they get ahead in life? Desperation, and really a deep sense of unhappiness, is driving this unrest,” said Xie.

Xie’s comments come just as business leaders are coming out to voice their stand as protests start to take a toll on the Hong Kong economy.

On Sunday, property tycoons in Hong Kong issued a joint petition to newspapers calling on the public to cease illegal protests and allow the return of stability, the South China Morning Post reported.

CITIC Capital CEO Zhang Yichen, meanwhile, posted a notice appealing for the restoration of law and order in Hong Kong on his WeChat social media account on Wednesday. The notice urges support for the Hong Kong government and police. CITIC Capital is the alternative investment arm of Chinese financial conglomerate CITIC Group.

Last year, global chairty network Oxfam flagged a “particularly severe” wealth disparity in Hong Kong, which it said was the highest among all developed countries and regions.

Hong Kong is the world’s most expensive city to buy a home, according to another report released in April.

Xie attributed the sky-high property price to the housing market being lead by local business leaders.

“The Hong Kong government is not really in charge (even though) most people think that they need to listen to Beijing, but perhaps more importantly, they are really influenced by the big property tycoons,” said Xie.

Although the Hong Kong authorities have changed housing policies several times, “in the end, they favor tycoons, giving the land to the tycoons,” the economist asserted.

But private developers “hold the land, not building much and they just try to squeeze the market and push the prices as much as possible,” he said.

Xie said real estate developers benchmark their prices against the salaries and big bonuses of those who work in the financial sector, but that has priced out the vast majority of the local population.

“For ordinary people, you make an income about 5% of a financial guy and they think you should get 5% of an apartment, so they create something like a ‘nano flat,’” he said, referring to tiny apartments in Hong Kong that can be the size of a parking space. “That is really crazy.”

“They think that people will just take it lying down forever, (but) eventually, it blows up,” said Xie, who was a former chief Asia-Pacific economist at Morgan Stanley.

“The key is that the political structure here is neither the Singapore situation where the government is on top, nor like Taiwan (where) it’s a democracy and people can vote,” said Xie, who recently penned an opinion piece in the South China Morning Post on the subject.

Hong Kong is “in between — just a bunch of business people calling the shots,” he added.

Beijing needs to distance itself from the tycoons in Hong Kong, said Xie.

“Every time, there’s a disturbance in Hong Kong, Beijing goes to these business guys for advice; you know something’s very wrong,” said Xie. “These guys are causing the trouble in Hong Kong, why are you going to them for advice every time?”

“They are the problem; they need to become regular business people, not having political power (and) running the place,” said Xie.

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16-08-2019, 06:44 AM.
Post: #12
RE: More Hong Kong companies say business impacted by mass protests
Broader perspective here:

Violent Protests In Hong Kong Reach Their Last Stage

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16-08-2019, 01:31 PM.
Post: #13
RE: More Hong Kong companies say business impacted by mass protests
(13-08-2019, 08:00 PM)specuvestor Wrote:
(13-08-2019, 05:32 PM)BRT Wrote: 'When will you die?' Hong Kong leader grilled at press conference

messy times

normal HK curtness actually... sometimes I wonder if they can do better if they were the government, and like UK doesn't want anything to do with the mainland. Shenzhen GDP already surpassed HK. So how will they position themselves vs hundreds of Chinese cities along the same east coast?

Singapore seems to be used as an example except that they didn't read properly that we actually wanted to be part of Malaysia.

i was chatting with a hker friend and apparently there's a bit of a back story here. turns out lam has said a few times something like "heaven will have a place for me". so the question can be seen as a response to that.

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16-08-2019, 07:01 PM.
Post: #14
RE: More Hong Kong companies say business impacted by mass protests
Hong Kong on brink of recession as trade war, political protests escalate

Reporting by Donny Kwok and Twinnie Siu in Hong Kong; Editing by Kim Coghill
AUGUST 16, 2019 / 3:56 PM

HONG KONG (Reuters) - Hong Kong is on the verge of its first recession in a decade as increasingly violent anti-government protests scare off tourists and bite into retail sales in one of the world’s most popular shopping destinations.

The economy shrank 0.4% in April-June from the previous quarter, revised government data showed on Friday, and conditions have sharply deteriorated since then as demonstrations spread, closing the airport at one stage and paralyzing prime shopping areas.

The Asian financial center, which also has one of the world’s busiest ports, was already under intense pressure from the escalating Sino-U.S. trade war and China’s biggest economic slowdown in decades.

The city’s government confirmed on Friday it was slashing its full-year 2019 growth forecast to a range of 0%-1% from the previous 2%-3%, which it had flagged a day earlier when it announced a modest economic support package.

The quarterly contraction in gross domestic product (GDP) was slightly worse than an initial estimate of -0.3% released just a few weeks ago, and pointed to a sharp deceleration from 1.3% growth in the first quarter.

Two successive quarterly contractions would meet the standard definition of a recession.

Months of increasingly hostile confrontations between police and protesters have plunged the international business hub into its worst crisis since it reverted from British to Chinese rule in 1997.

While official data has yet to fully reflect the impact of the latest violence, a private survey by IHS Markit found business activity in Hong Kong contracted for the 16th straight month in July, falling to a level not seen since March 2009.

“The recent local social incidents, if continued, will cause significant disruptions to inbound tourism and consumption-related economic activities, further dampen economic sentiment, and even hurt the reputation of Hong Kong as an international financial and business center,” government economist Andrew Au said in a statement.

The government also expects exports to remain sluggish or even weaken further in the coming months. Washington is imposing more tariffs on Chinese imports from Sept. 1, though the two sides are still in talks.

“It would still be difficult for (them) to reach a trade deal in the near future given their deep differences across a range of issues,” Au said.

The economy expanded 0.5% in the second quarter from a year earlier, its slowest pace since the 2008/09 global financial and down slightly from an initial reading of 0.6% and the first quarter’s 0.6% pace.


Hong Kong’s leader Carrie Lam said last week the economic impact on the city threatened to be worse than the 2003 SARS outbreak or the 2008 financial crash, both of which triggered sharp downturns.

Tourists are cancelling hotel bookings and some retailers are reporting heavy declines in business. Hong Kong is a key market for many global luxury brands and items such as Swiss watches, and retail sales fell for a fifth straight month in June.

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