Occupy Central has entered its second week and Hong Kong is counting the cost of a weekend of violence and disruption.
As of Monday morning, the numbers of protesters outside Hong Kong government headquarters in Admiralty have dwindled and the Causeway Bay and Mong Kok camps are thinning.
But the weekend, which marked the end of the “Golden Week” holiday, brought chaos and confusion to the streets – and businesses – of Hong Kong.
“We are open but we close when the fighting starts,” a shop assistant at watch retailer City Chain in Mong Kok told FinanceAsia. “Sales are down because people want to stay in safe areas,” she said.
The Hong Kong Retail Management Association (HKRMA) will issue a report on the impact of the protest as early as Monday but earlier warned that sales during the usually lucrative Golden Week could be hit by the “social atmosphere.”
China compounded the gloomy retail picture last week by banning tour-group visits to Hong Kong by mainland Chinese until the protests ended.
That these usually bolster Golden Week’s retail sales in Hong Kong is bad news for the city, considering retail and tourism account for 10% of its GDP.
Gregory So, secretary for commerce and economic development, met eight small- and medium-sized enterprises on Saturday to gather views on the protests.
SEE PHOTOS FROM THE WEEKEND'S PROTESTS HERE
According to So, the SMEs all expressed concern that the protests could dampen investor confidence in Hong Kong if they continued.
“Hong Kong is a world-renowned business centre. Our reputation and competitiveness would be at risk if business operations are affected for a prolonged time,” he said in a statement.
Shopping pall
The focus of the protest is outside the Hong Kong government’s headquarters in Admiralty, where tens of thousands of protesters have gathered since early last week.
But camps have also been set up in the key shopping districts of Causeway Bay, on Hong Kong island, and at Mong Kok in Kowloon.
In Causeway Bay, there were moments of violence on Friday night as suspected Triads attacked protesters, injuring some, but the weekend passed smoothly.
All the shops were open on Saturday and Sunday, and shoppers appeared unperturbed by the blockaded Yee Wo street, which contained about 50 protesters.
The area is home to one of three Apple stores in Hong Kong and the popular mall Times Square, which houses stores such as Louis Vuitton, Chanel and M&S, as well as various clothes retailers.
“It’s just like a normal day, just not like a holiday,” a shop assistant at watchmaker Titoni told FinanceAsia. When asked whether this was because of the protest, he said “it could be.”
However, the atmosphere was much more tense in Mong Kok, a key shopping district in Kowloon full of high-end jewelers, clothes retailers and technology outlets, not to mention budget merchandise outlets and street vendors.
On Friday night 19 people were arrested for attacking and injuring protesters, including several suspected Triad members, and on Saturday police separated rival groups of protesters as well as Pro-Beijing demonstrators. In fact, the tone was highly charged for much of the weekend and a number of journalists were also attacked.
Occupy Central protesters closed off a large section of Nathan Road, a major road artery in Kowloon, including a key intersection next to Mong Kok MTR station.
Some shops in the vicinity were closed at the weekend, including branches of Chow Tai Fook, smaller jewellers, some pharmacies and other retailers.
The area was dotted with taped-up windows, shuttered shop fronts, tents and makeshift blockades, although some stores remained open, especially convenience stores.
However, some shop assistants told FinanceAsia that sales were very much down and one gold seller said it had had no customers on Saturday.
A pharmacy owner on Nathan Road said that, while he understood why people occupied the area, it had hit his business.
“I don’t understand their movement,” he told FinanceAsia. “No matter who is in office it’s just the same thing. Just look at Hong Kong’s political environment,” he said.
The pharmacy used to earn HK$20,000 to HK$30,000 ($2,500 to $3,800) per day but on Monday last week earned less than HK$2,000.
Hong Kong’s retail sales have been on something of a downward trajectory this year, with sales falling 3.9%, 6.9% and 3.2% in May, June and July, respectively, according to HKRMA data. However, sales rose 3.4% in August compared with the same month last year.
Analysts said that Hong Kong would benefit from a resolution to the standoff.
Raymond Yeung, senior economist at ANZ, estimated last week that the disruption could result in a HK$2 billion hit from lost retail sales but told FinanceAsia that the impact would be unclear for a few days or weeks.
Meanwhile, Andrew Colquhoun, head of Asia-Pacific Sovereigns at Fitch Ratings, told FinanceAsia that what is more important is medium to long-term consumer confidence.
“Government institutions and the legal framework are strong but if there is any erosion in the long term it could be negative for the city in terms of its ratings,” he told FinanceAsia.
Divisions
Of perhaps greater importance is the story behind the numbers, which reflects a key issue for Hong Kong as it picks apart the lessons learned from the protest, however it may end.
The weekend was punctuated by arguments between protesters and disgruntled passersby, some of whom were unhappy that transport links had been compromised and others that their everyday lives were being made more difficult.
While small in numbers compared with the tens of thousands that have taken to the streets in support of Occupy Central, their voices reflect a growing division in Hong Kong society.
“You are destroying my livelihood,” shouted a Hong Kong resident (pictured left) at protesters in Causeway Bay on Saturday. “Pack up and go home”.
Meanwhile, a local middle-aged woman complained that the protesters were being selfish for blocking transport links.
Another elderly man approached the protesters and handed one a letter before walking away without uttering a word.
“Dear students, what you are doing is not good for democracy. You are imposing your ideals on other people. Please stop!” the letter, seen by FinanceAsia, said.
Christopher Lau, the 25-year-old advertising professional who was handed the letter, had sympathy for those who were unhappy but urged them to think of the bigger picture.
“Some people are unhappy because their bus journey to work has been disrupted. But I say to them we are fighting for their freedom,” he told FinanceAsia.
He said the protesters had had little support from local businesses, which is perhaps unsurprising, but he acknowledged it was a sensitive issue.
Michael Ma, a 65-year-old protester who works for a global oil group, told FinanceAsia that businesses had a responsibility to get involved because of the money they made in the city. “But it is very difficult as it’s so political,” he said.
Ultimately, it is this politics that will be the legacy of the Occupy Central protest, rather than retail sales or the performance of the economy.
The Hong Kong government and police drew criticism last week for using tear gas and pepper spray on protesters but have since retained a standoff approach.
But the violence in Mong Kok – and to a lesser extent in Causeway Bay – at the weekend appeared to revitalise a waning movement, with a peace rally swelling crowds in Admiralty on Saturday night.
Perhaps ostensibly, the government said it wants to ensure a clear passage for officials and students to return to work on Monday morning and would therefore seek to clear the area.
They have repeatedly called on the protesters to leave, a sentiment echoed by some pro-democracy supporters. Meanwhile, prominent members of the movement, including 17-year-old student leader Joshua Wong, have urged protesters to leave immediately if force is used by the police.
Some kind of deal therefore appears imminent, if only to avoid a violent end to the standoff.
“Retail sales and tourism have been hit but core industries such as exports and financial services have not been seriously affected so far,” according to a research note released this morning from Daiwa Capital markets.
Furthermore, the Hong Kong Monetary Authority said at the weekend that money and financial markets have been operating normally.
At least something is.
