Hong Kong unrest expected to hit economy ahead of latest data release
The Hong Kong government will today release revised GDP estimates for the first half of the year. The estimates will indicate the economy’s response to the ongoing anti-extradition bill protests, the US-China trade war, and low global economic activity.
China is Hong Kong’s largest export market—trade with the mainland accounted for 55% of total exports in 2018. Hong Kong is also used by wealthy Chinese citizens looking to divert their capital internationally.
However, the trade war has reduced its real exports by 5.4%, and fixed capital formation by a significant 12.1% over the same period in the previous year. Trade and manufacturing have been hit the hardest.
Tourism has also suffered owing to anti-Beijing demonstrations, which began as a movement against a proposed extradition bill on March 31 and escalated in early June.
If protesters and Hong Kong’s government are unable to negotiate a solution in the immediate future, the atmosphere of socio-political uncertainty will further hamper activity in the coming months.
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