Macroeconomic implications of Hong Kong protests

Hong Kong protests代写 Hong Kong has for more than ten straight weeks of unprecedented anti-government protests and pressure is still on.

 

Introduction

Macroeconomic environment of a country is a facet of various factors. In the context of Hong Kong, this environment is composed of gross domestic product, employment rate, business performance, inflation, and short-term and long-term effects of trends and changes in these factors and measures. For a country to have healthy business environment that is critical to the growth of the economy, there have to be balance between the various macroeconomic factors and policy making in the manipulation of the factors.

Hong Kong protests代写
Hong Kong protests代写

Politics in the form of mass protest is one aspect that cause imbalance that destabilizes the macroeconomic environment of a country. Hong Kong has for more than ten straight weeks of unprecedented anti-government protests and pressure is still on. The protests brought political and social instabilities that has left businesses and owner only speculating about the city’s economic future in case recession hit harder than policy maker anticipated.

The protests came with unforeseeable macro-economic consequences. Though most the impacts are difficult to anticipate some are already being felt as they add up to long-terms challenges to the city’s prosperity. The economy has already shown the signs of plummeting stock market and employment rate. The sudden turn of events culminated to business closures and other economic downturns. Overall, Hong Kong’s protests have severely affected its economy and slowly slumping to a recession.

Background and Context  Hong Kong protests代写

Anti-government protests have been going in Hong Kong for months and there are no signs of it slowing down. BBC reported that the demonstrations began in June as citizens protest against the government proposal to allow extradition to mainland China. Most people believed that the move endangers Hong Kong’s long time autonomy in judicial systems and incites dissidents. According to BBC the city has since independence from Britain in 1997 been enjoying autonomy more than mainland China.

People as well as tourists have been enjoying more rights freedom. As a results, the city has been a hub for investment and financial market. In response to pressure, CEO Carrie Lam gave in and suspended the extradition bill. However, the demonstrations have not ceased as people push for full democracy and inquiry into police misconduct at the time of protests.

Social and political instabilities result to economic downturn.  Hong Kong protests代写

According to Matta, Appleton and Bleaney (2017), political instabilities cause reduction in consumption and hence out that can take more than five years to recover. Hong Kong protests were characterized by drop in consumer spending on non-essential goods. The summer retail market from July to August declined by more than 10 percent compared to previous year. The events also led to the closure of Hong Kong International Airport for two day. The airport lost more than $76 million due to flight cancellations. It was a significant impact since the airport contribute to 5 percent of the total GDP. The retail market and airport have not yet recovered from the shock.

Additionally, Hong Kong is considered as an investment haven.  Hong Kong protests代写

There are many international companies that seek to do business in China and other regions. The Census and Statistics Department (2019) reported that there are 1,541 multinational companies in Hong Kong. These companies perceive the city as safe due to strong rule of law compared to mainland China. According to Toh (2019) reported for the CNN, business people and companies with anticipation of negative impacts of the protests can lower their economic activities. Toh was reporting in regard to the ongoing protests in Hong Kong that are scaring investors especially foreign businesses.

The economy suffers the repercussions of decline GDP which comes with trickling down effects to key sectors. The street demonstrations are stir uncertainties about a country’s future economy and politics and which is not good for investment and other businesses. Thus, Hong Kong becomes a classic example of a people-made macroeconomic recession. The protests have seriously affected four major sectors of the Hong Kong economy including properties, retail market, stock exchange, import and export trade and tourism.

Problem Statement  Hong Kong protests代写

Hong Kong has always been known a safe haven for businesses and investors because of rules of law, favorable business environment, and being one of the world’s leading economy. The city offers unusually stable and efficient business environment that is vested on One Country, Two Systems of administrations. However, the latest anti-government protests have caused more than necessary macroeconomic disturbance. Protests have resulted to heightened political and social crushes and hence economic uncertainties. As a result, the whole economy is continually becoming unstable and slowly falling to a dreaded recession.

Also, there are neither empirical nor theoretic analysis studies addressing the macroeconomic implication of Hong Kong protests. According to Matta, Appleton, and Bleaney (2017), mass civil protests are followed by economic crisis such as reduced output. The understanding of macroeconomic implication of Hong Kong protests will a starting to initiative a dialogue for economic healing. A detailed empirical research is needed to explore the impact of the protests to Hong Kong economy. The macroeconomic problems caused by mass protests can be solved by first analyzing the overall impact to key sectors in order to device strategies to revitalize the economy.

Purpose of Research  Hong Kong protests代写

This paper will focus on the macroeconomic problems including decline in stock market and employment rate created by recent mass protests in Hong Kong. Thus, the paper will explain the likelihood of economic recession through several macroeconomic variables including;

a. The negative real GDP growth is due to the decline in the consumption.

b. The continuous decline of the Hong Kong dollar makes Hong Kong lose dominant position in foreign trade.

c. The protests have had a huge impact on the stock market, big companies lost tens of billions of dollars in value overnight, for example Cathay Pacific airlines.

d. The protests have led to rise unemployment rate.

Research Questions  Hong Kong protests代写

The research will be based on the following questions;

a. How has the protests in Hong Kong impacted the GDP of the city?

b. What are the impacts of Hong Kong’s protests to the foreign investments and trades?

c. What is the effect of protests to the stock market?

d. How has employment rate been affected?

Literature Review  Hong Kong protests代写

News Reports on the Protests

Hong Kong has been on the spotlight in the last few three months because of the persistent mass protests in the city. Various media houses have been covering the events as they unveil and have dominated their daily headlines. BBC reported the first mass protest in June 10th and ever since there has been series of events in Hong Kong that has not only attracted the attention of the media but also governments (Griffiths, Cheung and Lee, 2019). South China Morning Post through Zheng, reported that United States has supported the protests as justified and called for China government to resolve the issue without violence. Since the protests began, they have escalated to unprecedented levels to one of the largest and longest protests in the world.

Bloomberg Economics found the stock market was slammed by more than $600 billion decline in July and persisted to August and September. The Gross Domestic Product that has been stable and increasing became sluggish with expansion of just 0.6 percent and high probability of future recession. The decrease in GDP was attributed to low performance in main economic domains of Hong Kong that included retail and tourism, transport, property and investments, as well as IPOs and deals. Retail and stock markets were the worse hit by the protests. There was reduction in foreign direct investments and exports by more than 35 and 27 percent respectively. IPOs and follow-on share offering fell be 43 and 38 percent respective.

Methodology  Hong Kong protests代写

This paper will use at least three primary sources and some internet researches. The research will focus on data analysis and some scholars’ views on Hong Kong events. The whole paper will comparison the impact of Hong Kong events on Hong Kong’s macroeconomy by comparing macroeconomic policies and data

Implications and Contribution to Knowledge

References  Hong Kong protests代写

Bloomberg. (2019). Here’s How Hard the Protests Are Slamming Hong Kong’s Economy. Bloomberg. Retrieved from https://www.bloomberg.com/graphics/2019-hong-kong-protests-economic-impact/

BBC. (2019). Why are there protests in Hong Kong? All the context you need. BBC. Retrieved from https://www.bbc.com/news/world-asia-china-48607723

Matta, S., Appleton, S., & Bleaney, M. F. (2017). The economic impact of political instability and mass civil protest (No. 17/03). CREDIT Research Paper.

Census and Statistics Department. (2019). Companies in Hong Kong with Parent Companies Located outside HK. The Government of the Hong Kong Special Administration Region. Retrieved from https://www.censtatd.gov.hk/hkstat/sub/sp360.jsp?tableID=133&ID=0&productType=8v

Toh, M. (2019). These global businesses are feeling the heat from Hong Kong’s protests. CNN. Retrieved from https://edition.cnn.com/2019/08/09/business/hong-kong-economy-protests-business/index.html

Griffiths, J., Cheung, E., & Lee, C. (2019). More than 1 million protest in Hong Kong, organizers say, over Chinese extradition law. BBC. Retrieved from https://edition.cnn.com/2019/06/08/asia/hong-kong-extradition-bill-protest-intl/index.html

Hong Kong protests代写
Hong Kong protests代写

 

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