On the ground in Hong Kong

Greetings from Hong Kong, where this week I was visiting clients and catching up with colleagues and friends. As you can imagine, I picked quite the week to visit!

Anti-government protests have continued into their 10th week, this time culminating in a big demonstration at the airport, which was forced to close earlier this week – the first time this has happened since the UK handed HK over to China in 1997. This is a big deal. HKG is the world’s third busiest passenger airport and also the world’s busiest by cargo traffic.

Thankfully for my part, the only protest I came across during my time here was at the airport last Sunday afternoon just as I landed. The arrivals hall was filled with around 300 peaceful college-age students. I was struck by how good natured and earnest they all were – as I walked into the arrivals hall I was approached by a student who handed me an information leaflet and asked if I had any questions about why they were protesting. I was also told that if I needed anything, I could ask them. Regardless of my somewhat selfish concerns about getting in and out of town without any travel headaches, targeting the airport seemed a clever strategy to draw international eyeballs to their cause.

How did we get here?

The airport shutdown came after months of anti-government demonstrations, beginning with the opposition to a bill that allowed people accused of crimes against mainland China to be extradited there. Critics argue this legislation could lead to people facing unfair treatment under China’s legal system, putting journalists and activists at risk. But the underlying narrative is that the bill gives China more control, something that many in HK are determined to resist.

HK is currently administered by China under a “One country, Two systems” agreement that guarantees autonomy with an independent judiciary and a separate legal system until at least 2047. Freedom of assembly and speech are protected. Interestingly, it’s one of the few places in Chinese territory where people can still commemorate the 1989 Tiananmen Square crackdown.

In response, hundreds of thousands of people turned out to protest and demand the extradition bill be pulled. Under pressure, Hong Kong’s Chief Executive Carrie Lam confirmed in July that the bill would be suspended. But it wasn’t enough to avert a full-blown political crisis.

Seeing footage of police firing tear gas at demonstrators in one of the world’s most important financial districts is surreal. It’s raised questions about how the central government in Beijing is going to assert its authority over HK’s 7.5 million population. As China’s People’s Armed Police conduct exercises near the border, international leaders are calling upon Carrie Lam to de-escalate the situation. But a cycle of intensifying political action has been established, amid a crackdown on protestors from the authorities. Fresh protests lead to more force from the police which, in turn, incites bigger rallies. Protests – and violence – compound.

Who are the protestors?

There’s a lot of information (and mis-information) online, so it’s hard to build an accurate picture of who the protestors are and precisely why they are taking to the streets. From conversations with people on the ground, the protestors are students, young professionals, lawyers and public sector workers. They’re normal people showing their anger toward unelected government officials who do not represent their interests.

What’s interesting is that the entire movement seems to be leaderless and decentralised, with demonstrations planned and decisions being crowdsourced on LIHKG.com (Hong Kong’s version of Reddit). This makes it hard for the HK authorities to “solve” the problem, as there is no “opposition leader” with whom to sit down and thrash out a deal.

At a meeting, a client of ours described a tear-gas filled protest which occurred a few weeks ago outside of his apartment, emphasising that the young, student protestors were all entirely peaceful, and the force being used by the police seemed disproportionate. The UN’s message to the HK police corroborates this, and indeed the motivation for moving the demonstration from the city streets to the airport seems to have been that the protestors would be safer there.

The peaceful sit-ins over the weekend at HKG escalated into quite dramatic scenes on Monday and Tuesday with loads of cancelled flights, arguments with tourists, and a clash with the police late on Tuesday night. On the one hand, disruptions at the airport certainly have tested the public’s support for the protesters, especially those who were due to fly on Monday and Tuesday (thankfully not me).

It’s impossible to say what triggered the airport demonstration going from peaceful to “violent.” However, there still seems to be an overwhelming sense of sympathy towards the protestors, as the characterisation from Beijing of the protesters being “puppets of the west” just doesn’t seem to make sense. The Wednesday “apology tour” by the protestors, where they stood with signs announcing how sorry they were to tourists who they inconvenienced, just furthered the feeling.

A list of demands

The protestors’ list of 5 demands has grown over time as the crisis has escalated:

  1. The extradition bill must be withdrawn.
  2. Universal suffrage for the Chief Executive and Legislative Council elections.
  3. The government must retract its characterisation of the violent clashes as “riots”.
  4. An independent inquiry into the actions of the police.
  5. Amnesty for anyone arrested during the protests.

Some are also demanding that the chief executive resign, believing her to be Beijing’s puppet.

At the time of writing, the controversial legislation in question is on hold. Lam has described it as “dead”, but protestors are unconvinced, demanding its full cancellation. Thus far, Lam has refused to confirm whether she has the autonomy to fully withdraw the extradition bill (one of the protesters’ main demands), or whether she has to defer to Beijing. Given how young the bulk of the protesters are, there is one slightly cynical view that when school starts up in September again, everything may just dissipate as the students all go back to class.

But the demand for universal suffrage has been around for a while, and it’s important to the people of Hong Kong as they’ve never directly elected their leader (including Carrie Lam). Instead, the leader is selected by a group of 1,200 elites known as the “election committee”. Many say that Lam’s troubles stem from the fact that she doesn’t have a mandate from the people. A compromise was first attempted in 2014, but the people rejected the requirement that all candidates be “vetted” by Beijing, resulting in the Umbrella Revolution.

The bigger picture

Anecdotally, the fallout from 10 weeks of anti-government demonstrations seems to be acting as a drag on the local economy. Despite being one of the world’s most densely populated cities, it has established itself as a world financial centre thanks to its reputation for order, safety, and peace. Disruptions to airports and infrastructure have challenged that reputation. Combined with the impact of the ongoing US-China trade war, there are fears of a recession. Hotel bookings are apparently down 30% year on year. Ultimately though, the stakes are greater than a contraction in economic growth.

If the HK’s relationship with China is permanently destabilised, it will undermine the territory’s reputation for safety and stability. HK has always traded on bridging the gap between China, Asia and the world. This escalating cycle of political unrest threatens that unique status. I believe HK is an incredible place to visit and do business. This latest trip has been incredibly positive and productive and I sincerely hope that the crisis abates and a sustainable compromise can be reached. In the meantime, I wish everybody, on both sides, a peaceful weekend.