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Coronavirus: HK reopening threatens to renew mass protests

Sou-Jie van Brunnersum
May 13, 2020

The COVID-19 public health crisis and the resulting economic downturn have dealt a severe blow to the Hong Kong economy. Small business owners have had a particularly hard time.

Coronavirus: Honk Kong reopening threatens to renew mass protests
Image: picture-alliance/ZUMAPRESS/Liau Chung-ren

Elyce Chau finally realized her dream when she opened her first business in Hong Kong in 2017 — La Luz cafe. She and another colleague operated the business mainly by themselves in its first two years, then hired full-time staff just a few months before the city's mass anti-government protests erupted and temporarily destabilized the business.

After almost a year of witnessing violent protests take hold of Hong Kong, the business slowly began to grow again, until yet another disaster struck the embattled city.

"Every day, we worry about the new changes or decisions from the government," Chau said, referring to the measures intended to curb the spread of the novel coronavirus, officially known as SARS-CoV-2.

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Chau said that she has not been able to upgrade the cafe's hardware during the health crisis and that she needs to save money to cover Hong Kong rental costs — one of the world's highest — as well as her staff's salaries.

"It's been a tragic last two years for Hong Kongers. The city is full of anger … The feeling of witnessing the place you grew up in and loved overturned is very sad," Chau lamented, adding that many businesses in the city have also had to dismiss part-time staffers amid the crisis.

Small businesses throughout the city have borne the brunt of the impact from protests since last year and are now having to take the full blow of the coronavirus crisis.

Virus measures cripple local industry

As of December, 340,000 small and midsized businesses accounted for more than 98% of all Hong Kong's business units and employed around 1.3 million people, according to government data. Amid the pandemic, some 1,000 restaurants and food establishments throughout the city had been forced to shut down or suspend operations.

On March 27, the city's chief executive, Carrie Lam, asked eateries to cut capacity by 50%, limit gatherings to four people (this has since been changed to eight), and place tables 1.5 meters (5 feet) apart.

The government also introduced a ban on foreign visitors to prevent imported coronavirus cases. Tourism declined by 81% year-on-year in the first quarter of 2020 — a massive shock for all businesses dependent on the city's tourism industry or international visitors to the city reputed to be the financial hub of Asia.

Read more: Coronavirus: A stress test for democracy

A week ago, Hong Kong slowly began easing coronavirus measures on social gatherings and venues, albeit with health and hygiene restrictions remaining in place. However, many restaurants and cafes are still forced to remain shut or limit their operations because they don't have the capacity to place tables 1.5 meters apart in the congested city. Establishments mainly used for the sale of alcohol are also expected to remain closed for at least another two weeks.

Taking toll on economy

Fallout from the coronavirus pandemic has pushed Hong Kong into its deepest recession since the aftermath of the global financial crisis in 2009.

Hong Kong's economy contracted by 8.9% in the first quarter of 2020 compared to the same period last year — the worst contraction since modern records began in 1974, the city's Census and Statistics Department announced on May 4.

A 10.2% drop in private consumption from a year earlier was also a major driver for the contraction, according to the government report.

Prior to the city's shutdown to contain the outbreak, Hong Kong's economy had already been struggling with recession. The economy began shrinking from the third quarter of last year amid violent protests and a government crackdown, as well as a number of unresolved geopolitical disputes. Global market volatility and developments in the US-China trade row had also left the territory with collateral damage.

Stock markets dropped in the beginning of May after US President Donald Trump intensified criticism of China over the coronavirus, reiterating his claim that the virus came from a laboratory in Wuhan. Trump then suggested that the US could impose fresh trade tariffs.

Protesters defy physical distancing rules

As Hong Kong and the rest of the world began to loosen COVID-19 restrictions and looked to restart their economies this week, economists cautioned against too much optimism, warning that relaxations of physical distancing measures could trigger renewed demonstrations, meaning the Hong Kong economy is likely to remain depressed.

Read more: After coronavirus, don't write off China as world's factory

Hong Kong police reported the arrest of 230 people — some as young as 12 — on Monday, after they responded to a series of "one country, two systems" protests the day before, which push to protect Hong Kong's civic independence from China. Police arrested the demonstrators on a range of charges, including defying a ban on gatherings of more than eight people. Tensions between Hong Kong authorities and residents have been rife ever since the administration sought to pass a now-withdrawn extradition bill, which was widely seen as a direct threat to Hong Kong's autonomy. 

The latest string of protests has proved to Lam's government that not even physical distancing rules can deter Hong Kongers from holding demonstrations. Economists worry that a renewal of protests alongside coronavirus cases, and the subsequent government measures that could follow are likely to deal yet another blow for business owners and workers.

But that is not how Chau sees it. She said that positive change and improvements to the work lives of millions of Hong Kongers will only come about "if the government really listens to us and respects the Hong Kong people."

"The recession is inevitable, but we view it as a challenge, experiences are gained and I believe we will be stronger when this ends," she said.