Protests squeezing Hong Kong economy, tourism, leader says

Bronze sculptures of bulls, the symbol of the Hong Kong Stock Exchange, are displayed at the Exchange Square in Central of Hong Kong, Tuesday, Oct. 8, 2019. The Hong Kong stock exchange on Tuesday formally dropped its bid to buy its London counterpart after the European exchange rejected the surprise offer. (AP Photo/Kin Cheung)
FILE - In this Oct 4, 2019, file photo, a man rests near a dog and the graffiti which reads "Dog Official" in Hong Kong. Hong Kong’s embattled leader Carrie Lam said Tuesday that the city’s economy is being battered by months of increasingly violent protests. (AP Photo/Vincent Thian, File)
Hong Kong Chief Executive Carrie Lam speaks during a press conference in Hong Kong, Tuesday, Oct. 8, 2019. (AP Photo/Vincent Yu
FILE - In this Oct. 7, 2019, file photo, pedestrians look at graffiti in front of China Travel Service in Hong Kong. Hong Kong’s embattled leader Carrie Lam said Tuesday that the city’s economy is being battered by months of increasingly violent protests. (AP Photo/Vincent Yu, File)
FILE - In this June 17, 2019, file photo, a man walks alone on normally busy road near the Legislative Council after protesters continue to protest against the extradition bill in Hong Kong. Hong Kong’s embattled leader Carrie Lam said Tuesday that the city’s economy is being battered by months of increasingly violent protests. (AP Photo/Vincent Yu, File)

HONG KONG — Hong Kong's economy is languishing after months of increasingly violent protests, the city's embattled leader Carrie Lam said Tuesday.

Lam, addressing reporters after a long weekend of more turmoil, said tourism arrivals were down by half and that hotels and retailers were suffering.

Hong Kong's third quarter economic data will definitely be "very bad", said Lam, the semi-autonomous territory's Beijing-backed chief executive said.

Lam said she did not have the data with her. But empty streets and tourist attractions are evidence of the fallout from the protests that began in June over a now-shelved extradition bill that would have allowed some criminal suspects to be sent to mainland China for trial.

Initially, the protests caused little damage and were confined to an area near Hong Kong government offices. But they've since spread to many parts of the former British colony, which enjoys freedoms guaranteed to the semi-autonomous region of about 7 million people when Beijing took control in 1997.

The demonstrations have gradually escalated into a broader anti-government movement that has grown increasingly violent, with protesters targeting shops and banks.

The city's airport has been periodically besieged by protesters, and some train and subway lines and shopping malls have suffered significant disruptions from the demonstrations.

Lam warned that the Chinese military might intervene if need be but said she hoped to revolve the unrest at the local level.

So far, Hong Kong's stock exchange has kept steady, and the benchmark Hang Seng index gained 0.5% on Tuesday. Prices have been supported by ample demand since shares listed in Hong Kong are perceived as being relatively cheap, says veteran investment manager Francis Lun.

The city's monetary regulators say Hong Kong has ample reserves to weather bouts of hard times.

But tourism and retailing are languishing, and some investors are shifting money out of the city, Lun says

Analysts say the political turmoil and the risk of intervention by Beijing could undermine Hong Kong's status as a world financial hub.

"Unless it stops soon...it's really Hong Kong's survival at stake," he told The Associated Press.

Goldman Sachs has estimated that between $3-$4 billion has been moved to Singapore from Hong Kong since August, based on estimates from bank deposit information.

Economic growth slowed to 0.5% year-on-year in the April-June quarter from a 3% rate of expansion in 2018.

The government has forecast growth in full-year 2019 likely will slow to 0%-1%.

Protesters are demanding Lam's resignation even after she withdrew legislation that provoked the latest rounds of turmoil. They also want investigations into the handling of the protests by police.

___

AP Business Editor Elaine Kurtenbach in Bangkok contributed.

Other News

Fidel Castro thanks Cuba, criticizes Obama, on 90th birthday

Aug 14, 2016

Fidel Castro thanked Cubans for their well-wishes on his 90th birthday and criticized President Barack Obama in a lengthy letter published in state media

Hedge-fund manager Cohen settles with US commodities agency

Aug 16, 2016

Billionaire hedge-fund manager Steven A. Cohen agrees to stay away from commodities business in deal with US agency

Hong Kong airline Cathay's 1H profit tumbles 82 percent

Aug 17, 2016

Cathay Pacific Airways' profit tumbled in the first half of the year as economic weakness in China and other important markets cut passenger demand while it faced cutthroat competition from rivals

The Budget Report seeks to provide comprehensive coverage and analysis on the current economic, financial issues around the world. First hand finance and economic news all day, every day.