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  • I'm walking through Hong Kong's Causeway Bay,

  • it's one of the city's major shopping hubs and while things are calm right now,

  • it wasn't too long ago that this was at the heart of the city's

  • pro-democracy protests - ones that have been paralyzing the city for months.

  • Demonstrations have been scattered throughout the city,

  • from parks to bridges, inside malls

  • and even a sit-in that resulted in the closure of the airport.

  • The turmoil has shaken up Hong Kong's economy which in 2019 entered its first

  • first technical recession since the financial crisis.

  • Hong Kong is one of the richest cities in the world, but months

  • of unrest and uncertainty is impacting business both big and small.

  • And I want to see firsthand how.

  • Protesters have sprayed this wall with graffiti which has since been covered up

  • by paint but not quite removed.

  • I've just discovered more graffiti by protesters - this here says: "We do this

  • because we love our home."

  • It's been really quite significant and it's especially hit retail, entertainment,

  • hotels, those kind of businesses now we actually see a real reduction in

  • mainland tourists and that's been a biggest hit of all.

  • Hong Kong's economy shrunk in the second and third quarter of 2019

  • marking a technical recession.

  • It was the first time in a decade that its economy weakened for two consecutive quarters.

  • The government forecasts the economy will contract by 1.3 percent in 2019

  • overall and the city is set to record its first budget deficit in 15 years.

  • The special administrative region is seeing less money from outside its borders,

  • and many Hong Kong residents are changing their spending habits as well

  • This is one of those businesses that has come out publicly to say it stands with

  • the Hong Kong protests.

  • Platforms have popped up showing maps of businesses believed to be

  • to be supporting the protests, as well as ones that are not.

  • And people are backing their side with their dollars.

  • Just look at this Instagram account which has amassed more than 180,000

  • followers since launching in September.

  • Its aim: to show and promote businesses that are in support of the protests.

  • I decide to visit some of the businesses on the map.

  • One of them is this restaurant chain that advertises its stance proudly

  • on its windows.

  • This is a grassroots movement that's distinguished by the color yellow, which

  • essentially says they support the Hong Kong movement, the Hong Kong protests.

  • Blue on the other hand is used for businesses perceived to be backing

  • the government and police. People can use this sticker to scan a QR code which

  • will take them to Google Maps. The map then reveals assumed yellow and blue

  • businesses around the city. Inside the restaurant I notice even the bottom of

  • the receipts are a nod in support of the protesters. So, are the customers aware

  • of the politics? One tells me he thinks everyone inside is conscious of the

  • business' stand on the protests and for him it's one of the reasons he's eating there.

  • It's my freedom, right? It's my freedom on how to spend my money.

  • But it's a divisive time right now. Many of the businesses I visit

  • or call are hesitant to speak on camera.

  • I finally find a bookstore that's willing to be interviewed.

  • Is it ok to ask you a question or two?

  • As part of the story, I'm with CNBC.

  • The store features art and literature related to the protests.

  • Are you worried at all as a business, taking a stance for one side, that it

  • could hurt business?

  • Not really because I heard some pros and cons about this so-called

  • the yellow economic circle, but then I see it in a more positive way as people

  • are getting more solidarity through economic ways.

  • but make no mistake, despite being on the so-called yellow side, he says he doesn't

  • particularly like that there are sides to begin with.

  • We want to be unified in the end. We are not aiming to segregate people.

  • While this store is one of the few that I find that's willing to get involved

  • in the politics, most want to stay out of it and it's hard to blame them.

  • Some global companies like Starbucks have been targeted and vandalized for

  • their perceived support of the government and many have already taken hits to their

  • sales as a result of the protests, including this bar in Hong Kong's Central District.

  • The implications of protests during the week have slowed business down.

  • Roadblocks, more police presence, so people tend to go home after work

  • these days instead of going out for drinks and dinners. Yeah it's been frustrating.

  • Massive disruptions to public transportation has sparked safety

  • concerns that have resulted in the cancellation of countless events

  • and conferences here.

  • Hong Kong's tourism and retail sectors have felt the most pain as the city's standing

  • as a stable financial hub comes into question.

  • August is typically a peak season for tourism in Hong Kong, but in 2019,

  • visitor numbers during the summer month plunged by 40 percent.

  • Just look at this chart. Mainland Chinese visitors account for nearly

  • 80 percent of tourists in Hong Kong. That dramatically decreased throughout the year.

  • The Chinese are not very happy about tour groups coming into Hong Kong.

  • They don't really want to see Chinese tourists in this kind of opposition and revolt

  • that you're seeing in Hong Kong: attacks with the police, the free news, this kind of thing.

  • The less of this kind of information that gets out to people in China,

  • the better the Chinese like it.

  • It's not just retail that's been suffering, many hotels are dealing with record low

  • occupancy rates.

  • With some of the political unrest in Hong Kong, tourist arrivals are down here.

  • How has that been?

  • I can't lie to you - it's certainly impacted business, but you know being part of

  • such a huge hotel company and the funnel it allows to bring, we

  • do a lot better than most hotels.

  • That reduction in tourism is in part responsible for thousands of restaurants

  • closing and also hurting global retailers like Prada and Louis Vuitton,

  • which are expected to close at least one location each.

  • Luxury brands are taking note of these closures.

  • Hong Kong is one of the top luxury shopping destinations in the world,

  • accounting for 5-10% of luxury spending globally and overall, retail sales have

  • steadily declined throughout the year.

  • While the protests were originally motivated by politics, many say

  • they've now become a platform for bigger issues.

  • It's so very expensive, one of the most expensive places in the world.

  • It's hard for Hong Kong graduates to get good positions in China.

  • It's difficult for people to have their own home. People live at home till they're 40.

  • Average salaries aren't much higher than they were 20 years ago.

  • Real salaries are probably about the same as we were 20 years ago for

  • graduating student. So it's a difficult place to live in for many, many people

  • not just the poor people, but also for the aspirant students, students from

  • middle class and this is being I think one of the keys to the discontent.

  • Hong Kong's government has unveiled multiple rounds of measures designed

  • to support businesses dealing with the fallout from a prolonged trade war

  • and social unrest. Those relief measures are worth more than $3 billion, with most

  • of it expected to go to the tourism and retail sectors.

  • Despite Hong Kong's economic woes, the city's stock exchange

  • minimized impact last year. It kept its position as a top market for new stock

  • listings globally, thanks largely to two gangbuster initial public offerings:

  • a secondary listing from Alibaba and Budweiser's Asia-Pacific business.

  • As protests continue into the new year many are wondering what happens next.

  • Will things settle down or is this just the beginning

  • of Hong Kong's economic disruption?

  • Hey guys it's Uptin, thanks for watching.

  • Check out more of our videos and let us know in the comments how

  • how you think the protests here will impact Hong Kong's economy.

  • While you're at it, subscribe to our channel and I'll see you next time!

I'm walking through Hong Kong's Causeway Bay,

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B1 hong kong retail tourism unrest economy

What Hong Kong’s protests mean for business | CNBC Reports

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    Summer posted on 2020/05/05
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