Turbulent days ahead for HK economy

People attend a protest march in Hong Kong on July 1, 2018, to coincide with the 21st anniversary of the city's handover from British to Chinese rule. (AFP photo)

Hong Kong Financial Secretary Paul Chan has warned the Asian financial hub is entering “a very difficult economic environment” as trade declines and growth slows.

“Industries like retail, catering and transportation have taken a hit because of the recent violent unrest, with significant revenue drops,” Chan wrote in his official blog on Sunday. “The depressed feeling in society is affecting consumer industries to different degrees.”

Street protests have damaged Hong Kong’s international image, as 22 countries have issued travel warnings for the city, and this may further hurt tourism, business and investment, he said.

Chan said the city’s government is closely monitoring the U.S.-China trade dispute and how it is impacting financial markets and the tech industry.

The move by the U.S. to name China a currency manipulator is unreasonable and doesn’t match the standards set by America, Chan said.

Gross domestic product contracted in the second quarter from the previous three months, leaving open the prospect of a technical recession if the unrest continues.

Hong Kong’s Chief Executive Carrie Lam said that the economic downdraft caused by the protests is worse than that during the SARS epidemic and the 2008 global financial crisis.