I'm walking through Hong Kong's Causeway Bay,
it's one of the city's major shopping hubs and while things are calm right now,
it wasn't too long ago that this was at the heart of the city's
pro-democracy protests - ones that have been paralyzing the city for months.
Demonstrations have been scattered throughout the city,
from parks to bridges, inside malls
and even a sit-in that resulted in the closure of the airport.
The turmoil has shaken up Hong Kong's economy which in 2019 entered its first
first technical recession since the financial crisis.
Hong Kong is one of the richest cities in the world, but months
of unrest and uncertainty is impacting business both big and small.
And I want to see firsthand how.
Protesters have sprayed this wall with graffiti which has since been covered up
by paint but not quite removed.
I've just discovered more graffiti by protesters - this here says: "We do this
because we love our home."
It's been really quite significant and it's especially hit retail, entertainment,
hotels, those kind of businesses now we actually see a real reduction in
mainland tourists and that's been a biggest hit of all.
Hong Kong's economy shrunk in the second and third quarter of 2019
marking a technical recession.
It was the first time in a decade that its economy weakened for two consecutive quarters.
The government forecasts the economy will contract by 1.3 percent in 2019
overall and the city is set to record its first budget deficit in 15 years.
The special administrative region is seeing less money from outside its borders,
and many Hong Kong residents are changing their spending habits as well
This is one of those businesses that has come out publicly to say it stands with
the Hong Kong protests.
Platforms have popped up showing maps of businesses believed to be
to be supporting the protests, as well as ones that are not.
And people are backing their side with their dollars.
Just look at this Instagram account which has amassed more than 180,000
followers since launching in September.
Its aim: to show and promote businesses that are in support of the protests.
I decide to visit some of the businesses on the map.
One of them is this restaurant chain that advertises its stance proudly
on its windows.
This is a grassroots movement that's distinguished by the color yellow, which
essentially says they support the Hong Kong movement, the Hong Kong protests.
Blue on the other hand is used for businesses perceived to be backing
the government and police. People can use this sticker to scan a QR code which
will take them to Google Maps. The map then reveals assumed yellow and blue
businesses around the city. Inside the restaurant I notice even the bottom of
the receipts are a nod in support of the protesters. So, are the customers aware
of the politics? One tells me he thinks everyone inside is conscious of the
business' stand on the protests and for him it's one of the reasons he's eating there.
It's my freedom, right? It's my freedom on how to spend my money.
But it's a divisive time right now. Many of the businesses I visit
or call are hesitant to speak on camera.
I finally find a bookstore that's willing to be interviewed.
Is it ok to ask you a question or two?
As part of the story, I'm with CNBC.
The store features art and literature related to the protests.
Are you worried at all as a business, taking a stance for one side, that it
could hurt business?
Not really because I heard some pros and cons about this so-called
the yellow economic circle, but then I see it in a more positive way as people
are getting more solidarity through economic ways.
but make no mistake, despite being on the so-called yellow side, he says he doesn't
particularly like that there are sides to begin with.
We want to be unified in the end. We are not aiming to segregate people.
While this store is one of the few that I find that's willing to get involved
in the politics, most want to stay out of it and it's hard to blame them.
Some global companies like Starbucks have been targeted and vandalized for
their perceived support of the government and many have already taken hits to their
sales as a result of the protests, including this bar in Hong Kong's Central District.
The implications of protests during the week have slowed business down.
Roadblocks, more police presence, so people tend to go home after work
these days instead of going out for drinks and dinners. Yeah it's been frustrating.
Massive disruptions to public transportation has sparked safety
concerns that have resulted in the cancellation of countless events
and conferences here.
Hong Kong's tourism and retail sectors have felt the most pain as the city's standing
as a stable financial hub comes into question.
August is typically a peak season for tourism in Hong Kong, but in 2019,
visitor numbers during the summer month plunged by 40 percent.
Just look at this chart. Mainland Chinese visitors account for nearly
80 percent of tourists in Hong Kong. That dramatically decreased throughout the year.
The Chinese are not very happy about tour groups coming into Hong Kong.
They don't really want to see Chinese tourists in this kind of opposition and revolt
that you're seeing in Hong Kong: attacks with the police, the free news, this kind of thing.
The less of this kind of information that gets out to people in China,
the better the Chinese like it.
It's not just retail that's been suffering, many hotels are dealing with record low
occupancy rates.
With some of the political unrest in Hong Kong, tourist arrivals are down here.
How has that been?
I can't lie to you - it's certainly impacted business, but you know being part of
such a huge hotel company and the funnel it allows to bring, we
do a lot better than most hotels.
That reduction in tourism is in part responsible for thousands of restaurants
closing and also hurting global retailers like Prada and Louis Vuitton,
which are expected to close at least one location each.
Luxury brands are taking note of these closures.
Hong Kong is one of the top luxury shopping destinations in the world,
accounting for 5-10% of luxury spending globally and overall, retail sales have
steadily declined throughout the year.
While the protests were originally motivated by politics, many say
they've now become a platform for bigger issues.
It's so very expensive, one of the most expensive places in the world.
It's hard for Hong Kong graduates to get good positions in China.
It's difficult for people to have their own home. People live at home till they're 40.
Average salaries aren't much higher than they were 20 years ago.
Real salaries are probably about the same as we were 20 years ago for
graduating student. So it's a difficult place to live in for many, many people
not just the poor people, but also for the aspirant students, students from
middle class and this is being I think one of the keys to the discontent.
Hong Kong's government has unveiled multiple rounds of measures designed
to support businesses dealing with the fallout from a prolonged trade war
and social unrest. Those relief measures are worth more than $3 billion, with most
of it expected to go to the tourism and retail sectors.
Despite Hong Kong's economic woes, the city's stock exchange
minimized impact last year. It kept its position as a top market for new stock
listings globally, thanks largely to two gangbuster initial public offerings:
a secondary listing from Alibaba and Budweiser's Asia-Pacific business.
As protests continue into the new year many are wondering what happens next.
Will things settle down or is this just the beginning
of Hong Kong's economic disruption?
Hey guys it's Uptin, thanks for watching.
Check out more of our videos and let us know in the comments how
how you think the protests here will impact Hong Kong's economy.
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