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Hong Kong protests display interdependence of social resilience and economic stability

Massive protests throughout Hong Kong have overcome the city over the last 11 weeks, displaying the resilience implications of social inequality and increasing economic concerns throughout the city. The clearest cause of the protests is an extradition bill, which would allow fugitives from Hong Kong to be sent to China’s mainland. Hong Kong exists under a “One Country, Two Systems” policy, where Beijing officials select Hong Kong’s leadership, but allow the city to function under its own laws. While the extradition bill has become a focus of the protests, it represents a larger dynamic of increased political tension with mainland China and deeper roots of inequality that have disrupted the city and affected resilience capabilities. 

The economic conditions in Hong Kong are negatively impacted by the ongoing protests, with fear that the city may soon enter a recession. Retail sales have plummeted, with May being the fourth straight month of decline. For some small businesses, the protests have disrupted their ability to open, and their income has dropped by about 50 percent. The chaos that has engulfed the city has additionally harmed the tourism industry. Hotel occupancy rates and visitor arrivals fell in July, and restaurants and other tourist sights have seen similar drops in their sales. This shock to the tourism industry has the potential to cause significant harm, as over 17 percent of Hong Kong’s GDP came from travel and tourism in 2018. According to Hong Kong General Chamber of Commerce Senior Economist Wilson Chong Sze, if tensions continue to escalate, the toll on the economy could also increase. Consumer sentiment will be strained, and tourists will be pushed towards other destinations. 

Housing conditions in Hong Kong (source Steve Cadman/Flickr)
Housing conditions in Hong Kong (source Steve Cadman/Flickr)

These economic woes are rooted in Hong Kong’s social issues. A fifth of Hong Kong’s population lives in poverty, with the city being home to some of the worlds highest rents and longest working hours. Housing issues clearly illustrate the widening wealth gap. The median price of a house is over 20 times greater than annual median household income, and over 210,000 residents live in the city’s subdivided apartments that span only 48 square feet. These exceptionally small yet expensive housing options have led to anger with Hong Kong’s leadership and have placed an enormous burden on the city’s people. Protesters claim that Hong Kong leaders have been chosen to represent Beijing’s interests, and their policies benefit property developers and big companies as opposed to the city’s citizens. Since the government makes money when land is sold to property developers, they are hesitant to provide more affordable housing for the people of the city, and instead allow for more expensive and luxury developments that favor the wealthy. Forced to live in the subdivided apartments sometimes called “cages” or “coffins,” social unrest among the population has stemmed from this inequality. 

The protests have highlighted how roots of socio-economic inequality can lead to a city wide lack of resilience, and their effects show the interdependence of social resilience with economic stability. As the protests overcame Hong Kong International Airport, check-ins were suspended and the cancellation of nearly 1,000 flights occurred in response. This shock disrupted business throughout the country, and have alarmed financial investors throughout Asia. Similar shut downs and disturbances will paralyze the city and make them susceptible to further shocks. After 11 weeks, the rallies show no sign of ending soon, making them poised to have increasing economic and political effects. As the world watches the protests in Hong Kong, other communities of all sizes should observe how local social capital, not only between neighbors, but also between citizens and their leaders, can have far reaching effects on economic systems.

Sources and Further Reading

Why Hong Kong protesters are outraged by extradition bill – CNN

Hong Kong spends billions to avert recession as protests hit the economy – CNN Business

Hong Kong protests hit city where it hurts – in the wallet – South China Morning Post

Hong Kong protests: What’s going on and what’s the impact – The Straits Times

Hong Kong – Contribution of travel and tourism to GDP as a share of GDP – Knoema

Tiny Apartments and Punishing Work Hours: The Economic Roots of Hong Kong’s Protests – The New York Times