World Economy

Protests No Immediate Threat to HK Economy

Protests No Immediate Threat to HK EconomyProtests No Immediate Threat to HK Economy

Analysts say that Hong Kong’s ongoing pro-democracy protests are unlikely to affect the city’s economy. They admit, however, that a protracted conflict may force the companies to move their businesses out of the city.

Over the past few weeks, Hong Kong’s streets are filled with protesters who are demanding universal suffrage. But not everyone in the Asian financial hub supports the idea.

“The movement is not going to affect the city’s financial sector in the short term,” Ricky Tam, chairman and founder of the Hong Kong Institute of Investors, told DW. “The rents in Hong Kong’s central district – the Occupy Central’s hub – have already increased manifold in the past five to six years, forcing many companies to move their businesses to other areas,” he added.

Tam said the movement didn’t emerge suddenly, and the financial institutions had sufficient time to work out contingency plans.

Although the short-term impact might not be drastic, according to Tam, the political instability could damage Hong Kong’s competitiveness and appeal in the long run. “Companies that were willing to set up their offices in Hong Kong might look for other alternatives, for instance, Singapore,” Tam explained. “The political turmoil is hindering the government’s functioning.”

More than the economic impact, what concerns Hong Kong’s administration is the protests’ political repercussions.

Activists also slammed the government for spending public money unwisely, splashing out millions of funds on useless schemes.