The reiteration of the United States’ call to China to honour its ‘one country, two systems’ commitment in regard to embattled Hong Kong could not have come at a more opportune moment with the protests in that island continuing for more than two months now and threatening to get out of control.
The US Secretary of State, Mr. Mike Pompeo, has asked Beijing to respect the rights of demonstrators to protest. 'We very much want to make sure that those folks who have the desire in their hearts to protest, to speak out on behalf of their own freedom, their own liberty, can do so. They should do so in a peaceful way and the Chinese government should respect their right to speak out in the way that they’re speaking out,’ he said.
He also recalled his President, Mr. Donald Trump’s warning against any action like Beijing's bloody suppression of pro-democracy protests in Tiananmen Square in 1989. And the Chinese daily Global Times, called the US Vice President, Mr. Mike Pence’s remarks on linking the trade talks to the Hong Kong protests as ‘outrageous’.
Meanwhile this economic hub east of China is on the verge of its first recession in a decade as the increasingly violent protests are scaring off tourists and bite into retail sales in one of the world's most popular shopping destinations.
During the two-month standoff its economy has shrunk 0.4 per cent and revised data showed conditions had sharply deteriorated since then as demonstrations spread, closing the airport at one stage and paralysing prime shopping areas.
The Asian financial centre, also has one of the busiest ports, has already been under intense pressure from the escalating Sino-US trade war and China's biggest economic slowdown in decades, as also the US eyeing the South China Seas.
The city government has confirmed it was slashing its full-year 2019 growth forecast to a range of 0 per cent-1 per cent from the previous 2 per cent-3 per cent, which it had flagged a day earlier when it announced a modest economic support package. Two successive quarterly contractions would meet the standard definition of a recession.
These increasingly hostile confrontations have plunged the international business hub into its worst crisis since it reverted from British to Chinese rule in 1997. A private survey has found business activity has contracted for the 16th straight month in July, falling to a level not seen since March 2009 of the Asian Tigers bubble. It also expects exports to remain sluggish or even weaken further in the coming months with Washington imposing more tariffs on Chinese imports from September 1.
The Hong Kong leader, Ms. Carrie Lam, had said the economic impact on the city threatened to be worse than the 2003 SARS outbreak or the 2008 financial crash, both of which triggered sharp downturns.
More problems are in store to the city with Taiwan offering asylum to people facing persecution and business problems and China warning them to ‘stop meddling’ in the territory's affairs. The flight of capital is indeed a serious problem that China will have to confront.
The Taiwan President, Mr Tsai Ing-wen, had voiced support for granting asylum to some protesters, with the semi-autonomous financial hub in the midst of the political crisis.
Mr. Ma Xiaoguang, a spokesperson for the Chinese cabinet's Taiwan Affairs Office, warned Taiwan's ruling Democratic Progressive Party to ‘stop undermining the rule of law in the Hong Kong Special Administrative Region, stop meddling in Hong Kong affairs, and stop indulging criminals in any way’.
Last month after dozens activists reportedly involved in the storming of the city's parliament fled to Taiwan, Taipei said it would provide assistance to those seeking sanctuary.‘They openly claim to provide (protesters) asylum, making Taiwan into a 'haven sheltering criminals', where does this put the safety and welfare of the Taiwan people?’ asked Mr. Ma.
Meanwhile the other Chinese territory of Macau, which poet Auden called the pimple on the face of Asia, is set to elect as leader the only candidate for whom it is allowed to vote: a Beijing-backed former legislator who is expected to cement China's control over the special administrative region. It would also distance itself from the protests in Hong Kong.
The selection of former legislature head Ho Iat Seng is scheduled for Aug 25, when he will be chosen by a 400-member pro-Beijing committee to lead the world's largest gambling hub for the next five years.This former Portuguese colony is trying to position itself as a beacon of stability and model for the Chinese government's ‘one country, two systems’ formula through which Beijing administers Macau and Hong Kong.
Macau-born Ho moved into government in the early 2000s after starting off in the family business under his industrial tycoon father, Ho Tin. He has no ties to the casino industry, in contrast to previous leaders, and will play a key role in determining what will happen to the six casino operators when their licenses expire in coming years.
Mr. Ho has said he wants ‘healthy’ development for the gambling industry, as it is the main source of tax revenue for the government. He has also warned that the protests and the China-US trade war could hurt Macau's economy.
Meanwhile Ms. Lam has attempted to resign several times in recent weeks over the ongoing unrest.
Appointed by Beijing, she has admitted her government’s ‘total failure’ in handling a proposed extradition bill that would have allowed the territory to deport criminal suspects to the mainland for trial.
Amid the marches and international criticism of the heavy-handed conduct of police in handling protesters, Ms Lam repeatedly offered to step aside, only for Beijing to insist she stays on. It is of the view that ‘no one else can clean up the mess and no one else wants the job.’
Her resignation has been one of the core demands of the protest movement since the unrest began, but the chief executive has repeatedly insisted she must be given the chance to win back Hong Kong people’s trust. Ms Lam expressed concern for the safety of the city’s police officers after Sunday was marred by yet more clashes with demonstrators.
This ongoing unrest has made China's biggest e-commerce company Alibaba Group delay its 15 billion dollar listing in Hong Kong’s stock exchange.
The company held a board meeting before its latest quarterly earnings release last week, during which it decided to postpone the Hong Kong listing which was set to take place in late August.
The decision was made on the lack of financial and political stability there amid more than 11 weeks of demonstrations which have become increasingly violent and plunged the city into turmoil. With the unprecedented airport shutdown and Hong Kong's stock market plunge to seven-month lows last week,
Alibaba said no new timetable has been formally set. It could launch the Hong Kong deal as early as in October, seeking to raise 10 billion dollars to 15 billion, when political tensions ease and market conditions become favourable again.
That seems a distant dream with China also facing global censure for its unbridled human rights violations in the western region of Xinjiang province with the massive incarceration of the Uighur minority in the ‘education camps’ and razing of mosques and other historical sites that had provided them a distinct identity. The long drawn protests in the eastern showpiece of Hong Kong, images of which are being shown on television screens across the world are the last thing they would like to have on their plate when they have embarked on the spectacular 'road and belt' initiative .