Hong Kong Unrest a Threat to Economic Stability

On Tuesday, in response to the Hong Kong unrest, the Chief Executive Carrie Lam said that the U.S. legislation supporting the protesters may harm the business confidence in financial hub, as she declared a fourth round of relief measures to boost city’s shattered economy.

Carrie Lam told the reporters that the Hong Kong Human Rights and Democracy Act signed into the U.S. law in last week was wholly unnecessary, as former British colony faces with its first recession in a decade.

It’s the requirement of the act that U.S. State Department to certify at least annually that Hong Kong maintains enough autonomy to justify the favorable U.S trading terms, and threatens the sanctions for human rights violations.

“The impression currently is on confidence, because the corporates will be worried about the actions that U.S. government may take in future after they review this legislation,” Lam said.

Hong Kong Chief Executive did not specify what will be the additional measures, that would be taken to boost the economic activity of the region but the details would be announced in near-term. Recently to up-lift the economy, government has offered relief of about HK$21 billion ($2.7 billion) particularly in the transport, retail sectors and tourism.

Recent Hong Kong unrest has hit badly the retail sales that fell by their steepest on record in October, as protests scared off the tourists and hit spending.

On Monday, December 2, 2019, China banned U.S. military ships and aircraft from visiting Hong Kong. That also accounted for a bad news for the economy, and a rest and recreation stop for the U.S. Seventh Fleet in retaliation for the U.S. legislation.

The ongoing violent unrest in the Hong Kong by six months becomes the biggest challenge to Chinese stability, since the bloody crackdown on pro-democracy protesters in and around the Beijing’s Tiananmen Square in 1989.

The approvals for this type of port visits were a matter for China’s Foreign Ministry, Lam said.