Wednesday 18 September 2019

Bank warns Hong Kong protests will hit economy

Demonstrators stand on turnstiles during a protest at the Yuen Long MTR station in Hong Kong. AP Photo/Kin Cheung
Demonstrators stand on turnstiles during a protest at the Yuen Long MTR station in Hong Kong. AP Photo/Kin Cheung

Felix Tam and Alun John in Hong Kong

A major bank has warned that weeks of protests in Hong Kong could hit the economies of the Chinese-ruled city and mainland China itself as demonstrators headed for a sit-in at the subway site of a mid-summer mob attack.

The Hong Kong-based Bank of East Asia Ltd (BEA) posted a 75pc slump in first-half net profit after it wrote down loans in China because of a downturn in commercial property markets outside China's top cities.

It also warned that social unrest in Hong Kong and a trade dispute between China and the US could affect the economies of China and the former British colony.

"The tense atmosphere [in Hong Kong] is likely to weigh on consumer and business confidence, and on in-bound tourism, if there is no resolution soon," it said in a statement.

Some Hong Kong companies have been dragged into controversy after 11 weeks of sometimes violent clashes between police and pro-democracy protesters, angered by a perceived erosion of freedoms.

Pilots and cabin crew at Cathay Pacific Airways described a "white terror" of political denunciations, sackings and phone searches by Chinese aviation officials.

BEA and its rivals have closed branches in the vicinity of protests on a number of separate occasions.

"The recent situation in Hong Kong causes signs of concerns for the local SMEs [small and medium-sized enterprises]," bank co-chief executive Adrian Li told reporters.

"It is because you see that if the current condition continues, [it] shall affect tourism, retail trade, as well as investors' confidence.

"Nevertheless, our Hong Kong asset quality remains very healthy."

Protesters were preparing to gather yesterday at the suburban Yuen Long mass-transit rail station, one of a series of running demonstrations over 11 weeks that have sometimes turned violent, including the storming of the legislature and havoc at the airport.

On the night of July 21, about 100 white-shirted men stormed the station hours after protesters marched through central Hong Kong and defaced China's Liaison Office - the main symbol of Beijing's authority over the city.

The men attacked black-clad protesters returning from Hong Kong island, passers-by, journalists and legislators with pipes and clubs, wounding 45 people.

Anger erupted in June over a now-suspended bill that would allow criminal suspects in Hong Kong to be extradited to mainland China for trial. Hong Kong leader Carrie Lam said again on Tuesday the legislation was dead.

And in the most recent cause for concern, a Chinese national working at Britain's Hong Kong consulate has been detained in China's border city of Shenzhen for violating the law, likely worsening already strained ties between Beijing and London.

Irish Independent

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