The problem with Hong Kong (& its not the protesters)
September 30, 2014
By Matthew Tukaki, Editor of EntreHub
You might be wondering why a news site dedicated to entrepreneurs would have a view on what is happening in Hong Kong at the moment in reference to the protests. Put simply more than 300 of our members come from Hong Kong (start-ups, entrepreneurs and small business) and in an internal survey we have just done with them in respect of how they see the protests 92% responded that they felt in order for Hong Kong to succeed democratic and economic freedoms were fundamental. That was an overwhelming enough number to trigger further investigation. Having just written a peice covering my recent visit to Beijing I could not help seeing two worlds colliding. Read on:
It is impossible to turn on a television or open a newspaper and not see the turmoil unfolding in Hong Kong. In fact, one of our correspondents in Hong Kong recently reported that trying to get to the office using public transport or private car was next to impossible. Reports out of Hong Kong are also flagging a continued downward trend in retail sales with the protests turning off the traditional influx of mainland Chinese visitors over the National Holiday period.
The Global Times (a Chinese state media owned outlet) is using the challenging business conditions as an argument for why the protests should come to an end siting in its editorial Monday that “These activists are jeopardizing the global image of Hong Kong, and presenting the world with the turbulent face of the city,”.
It would be easy to trade that statement off as being state propaganda but there are real concerns that what is currently unfolding could have broader economic implications and impact Hong Kong’s standing as a financial hub in Asia.
Andrew Colquhoun, head of Asia Pacific sovereign ratings at Fitch said “whether the political standoff eventually impacts domestic and foreign perceptions of Hong Kong’s stability and attractiveness as an investment destination.” The reality is that there have already been implications with the stock market dropping, banks and institutions shutting up shop and retailers in the affected areas winding business down because of the risk of remaining open and potentially suffering loss and damage. Earlier this week the Hong Kong Monetary Authority had to reassure investors that all would be well and that it would “inject liquidity into the banking system as and when necessary” to mitigate the disruption.
But, before you take a stand and agree that business and the economy will be impacted over the longer term and therefore there is a rational argument to be made to the protesters, you cannot unravel the connected nature of democracy with economic freedom. The harsh reality is that Hong Kong was a successful and thriving economy long before the 1997 change over between the United Kingdom and China and the only reason the Island would continue to be successful is if it was not pulled into the same system as mainland China.
A local businessman interviewed by the BBC said “I think it’s just the government trying to threaten us by saying the financial market is crashing down” with another saying “It’s very peaceful … and I’m so sad because the Police has to do this way to the peoples. I’m very disappointed about the government”
An expatriate business man also told the BBC from the protests that “…this is about the long term future of Hong Kong, freedom of speech…about being a little bit different to mainland China.”
And it is those comments that should worry the central government in so far as even business people recognise that without the freedoms that were guaranteed under the handover the future of the local economy could be at risk.
“If we can’t be touched by these young kids we are just not human beings, these kids are wonderful, they have done a great job.” Was how Hong Kong Billionaire Jimmy Lai described the protestors and this is why Jimmy, with those business people interviewed by the BBC, are right to be concerned. At the very heart of the protest movement are young people from right across Hong Kong – the very future of the financial system, the economy and the Island.
The reality is the financial system did not collapse and there has been no chaos – but is this another Tiananmen Square moment? While the Chinese Foreign Ministry have now warned other countries not to meddle in its internal affairs the position of business is all the more interesting. Business can chose to remain in Hong Kong or it can go elsewhere and government decision makers should be mindful of that because there are now a great many other options when it comes to hubs in Asia from Seoul, the rise of Taipei, the increasing strength and growth of Jakarta and the stability of Singapore. No government in its right mind would want another Tiananmen Square on its hands.
It would be even better if government officials stood back and took a leaf out of Nelson Mandela’s play book when he said “Money won’t create success, the freedom to make it will.”
Fact and Timeline Check: What is this all about and where has it come from?
1997: Hong Kong, a former British colony, is handed back to China under an 1984 agreement giving it "a high degree of autonomy, except in foreign and defence affairs" for 50 years
2004: China rules that its approval must be sought for changes to Hong Kong's election laws
June-July 2014: Pro-democracy activists hold an unofficial referendum on political reform and a large rally. This is followed by protests by pro-Beijing activists
31 August 2014: China says it will allow direct elections in 2017, but voters will only be able to choose from a list of pre-approved candidates. Activists stage protests
22 September 2014: Student groups launch a week-long boycott of classes in protest
2017: Direct elections for chief executive due to take place
You can’t go past a news paper, radio show or television news story these days without being flooded by all things Bitcoin or Crypto Currency. Some say it’s the new world of money while others suggest its all just a passing fad. Whatever your position or preference of...
This week I announced a suite of measures for the Government to consider when it comes to small and medium sized business and what we can all be doing as we start to look at emerging from the COVID19 lockdown. The reality is that a good number of small business owners,...
As someone who has been working in suicide prevention for some years now i know that often having a simple conversation can make all of the difference when a loved one is doing it tough. COVID 19 and the lock down tends to amplify how we feel when we are isolation or a...
We know that mob out there are uncertain as to what the COVID-19 / Corona Virus means for them – this can cause us all to panic and some in community more so that others. Panic attacks can compound the situation so we gather some information about what you can do now t...
Don’t forget our elders can suffer in silence too: suicide prevention
Many people think that mental health and suicide are not topics that impact our elders but they could not be more wrong. The data tells us there continues to be an emerging trend when it comes to peop...