The protests and accompanying violence on both sides escalated again this past week in Hong Kong. The protests started in March but gained momentum in June, when an estimated 1 million Hong Kong citizens went to the streets. This, not unlike the “Yellow Vest” protests that have continued in France for nearly a year.
Once the “mob” has been let out, these situations tend to take on a life of their own regardless of the issues involved. Further, it is almost inevitable that violent incidents increase. The endgame is fairly predictable. Either the government capitulates to the protestors, as what happened in France, or the government moves in with force as what happened in Thailand.
In the case of Hong Kong, it is unlikely that the Beijing government will give in to the protestors’ demands. It is also unlikely—at this point—that the national government would use its military force to stop the uprising. The international ramifications would be too great.
It appears that Beijing is intent on letting things play out maybe with the hope that the protestors “burn their own house” and local public opinion turns in Beijing’s favor. Either way, both sides are in a dangerous game. The Hong Kong economy is crashing. Economic activity contracted by 3.2 percent in the quarter ending in September as exports dropped, consumer spending collapsed, and tourists are staying away.
The latest number for August shows a 40-percent decrease in tourism, and September is probably going to be worse. The number of tour groups from the mainland—which usually account for almost 80 percent of arrivals—plummeted 63-percent year-on-year in August, and fell 90 percent in the first 10 days of September.
While there are those here in the Philippines that are supporting either the national government or the protestors, there may be direct implications for the Philippines that we should start thinking about. No one knows where this is going.
Hong Kong has been a major economic gateway to China for decades and the Philippines’s participation is substantial. In 2018, Philippine exports to Hong Kong reached $9.6 billion, 76 percent of which was electronics and electrical equipment. About 15 percent of our total goods exports go to Hong Kong.
Hong Kong is a top tourist destination for Filipinos. However, Hong Kong does send some tourists to our shores. Hong Kong is not on the top 10 list of countries to send tourists to the Philippines. However, in 2018, some 118,000 tourists from Hong Kong did visit. This year that number has fallen to 60,000 as of September.
More critical are the Filipino workers in Hong Kong, numbering about 140,000. There are two concerns. The first is obviously what happens if the Beijing government intervenes militarily, declaring martial law or some other use of force. The second is the impact on these overseas workers if the Hong Kong economy continues to crater. We need to start thinking about a “Plan B” and not simply cheer for one Chinese team, or the other.