'Occupy' will destroy businesses
Updated: 2013-06-05 07:41
By Yang sheng(HK Edition)
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Hong Kong offers the best business environment in the world. In the 2013 Business Environment Report published by the World Bank, it ranked second among 183 economies around the world, higher than ever before.
Indeed, Hong Kong is a globally renowned financial center, and Central is the "center of the center". The first and foremost condition for its normal operation is a sound and business-friendly environment under law and order. However, a brief glimpse into the "Occupy Central" plan tells us that agitators are trying to paralyze the business neural center, and use it as a bargaining chip in exchange for so-called "genuine universal suffrage". This explains why the Basic Law Committee deputy director Elsie Leung Oi-sie slammed "Occupy Central" as "dictatorship by the minority" that gambled on the well-being of Hong Kong people.
Can we calculate the scale of this political ordeal's potential economic damage? The answer is yes and no, because catastrophic impacts can be both tangible and intangible. Professor Lui Ting-ming, a well-known economics academic at the Hong Kong University of Science and Technology, estimated the illegal campaign may inflict HK$1.6 billion a day in financial losses on Hong Kong; while Legislative Councillor Cheung Wah-fung, who represents the financial services sector, has put the estimated worth of missed stock transactions on the local bourse at HK$10 billion an hour, if "Occupy Central" is to be followed through.
The damage caused could also be profound, invisible and therefore incalculable. We all know that "Occupy Central" is a blatant challenge to the spirit of the rule of law, which Hong Kong's stability and prosperity have depended on. As Shirley Yuen, Hong Kong General Chamber of Commerce chief executive, directly pointed out, "many companies choose to do business here because of our rule of law, expertise and stable environment". Once the well-established reputation is ruined, Hong Kong's future is at stake. The harm by "Occupy Central" will hurt other pillar industries of the city as well. When the financial industry is disrupted by political turmoil the whole business environment will turn dangerous, adversely affecting tourism, foreign trade and logistics as well as professional services.
Many businesses in Hong Kong are more worried about the ominous implications for their existence in the years to come than its immediate fallout, because the opposition parties have apparently developed an insatiable appetite for being increasingly destructive until their goal of seizing Hong Kong's governing power is reached. There is no guarantee the "Occupy Central" advocates won't do it again in Tsim Sha Tsui or Causeway Bay if their demands are not met the first time around, but Hong Kong's stability and prosperity will be in jeopardy for sure.
In fact, the intended damage "Occupy Central" will do to Central is already rearing its ugly head as we speak. Since Tai Yiu-ting started rolling out his illegal campaign plan, many multinational financial institutions and corporations in other industries headquartered in Central have been busy making risk assessment. Some businesses are considering "moving part(s) of their operations out of Central" lest the impact of "Occupy Central" is too much to handle. Some other companies even weighed the pros and cons of "clearing out" of the top central business district completely for fear of having to close shop when "Occupy Central" makes their normal operations impossible. Meanwhile, concerned hedge funds are ready to dump their holdings before ratings agencies mark Hong Kong down for overwhelming political disturbance.
Individual small investors will also suffer significantly if the stock market plummets as a result of panic selling. A business opinion poll conducted in April of Hong Kong-based firms showed 37 percent of corporate respondents believed "Occupy Central" will bring "serious damage" to their operations; 45.7 percent thought it will do "damage"; 13 percent foresaw some "slight damage", and only 4.3 percent expected "no damage".
In response to the looming dangers brought about by "Occupy Central", people with breadth of visions across all sectors of the society have repeatedly urged citizens to boycott such unruly and lawless acts. Some of the city's most influential and broadly representative business groups have over the past few months expressed publicly their grave concern over the matter. For example, the Chinese General Chamber of Commerce and the Chinese Manufacturers' Association, which together represent more than 9,000 businesses, struck a stern warning in three mainstream newspapers - the Hong Kong Economic Times, Hong Kong Economic Journal and Sing Tao Daily - that while "Occupy Central" could cost the city billions, the long-term competitiveness could be severely undermined, and the overall damage beyond estimation.
"Occupy Central" remains theoretical at this stage, and we might not overstate its feasibility though. But, the ill-conceived plan has gathered substantial momentum in the last two months, due to its masterminds' relentless inflammations. We should come to grasp the reality that "Occupy Central" is merely a prelude for struggle over the Hong Kong SAR's political power. We should instead gain an insight into the matter, and must not treat it lightly. Any neglect could prove fatal to our city's sustainable and steady development.
The author is a current affairs commentator.
(HK Edition 06/05/2013 page1)