Hong Kong protesters sit-in at subway station as bank warns of economic fallout

Protesters call people to join further rallies against the government at Kowloon Tong subway station; (Reuters pic)

HONG KONG: A major bank warned on Wednesday that weeks of protests in Hong Kong could hit the economies of the Chinese-ruled city and mainland China itself as demonstrators began to gather for a sit-in at the subway site of a mid-summer mob attack.

Hong Kong-based Bank of East Asia Ltd (BEA) posted a 75% slump in first-half net profit after it wrote down loans in China because of a downturn in commercial property markets outside China’s top cities.

It also warned that social unrest in Hong Kong and a trade dispute between China and the United States could affect the economies of China and the former British colony.

“The tense atmosphere (in Hong Kong) is likely to weigh on consumer and business confidence, and on in-bound tourism, if there is no resolution soon,” it said in a statement.

Some Hong Kong companies have been dragged into controversy after 11 weeks of sometimes violent clashes between police and pro-democracy protesters, angered by a perceived erosion of freedoms.

Pilots and cabin crew at Cathay Pacific Airways described a “white terror” of political denunciations, sackings and phone searches by Chinese aviation officials.

BEA and its rivals have closed branches in the vicinity of protests which are already exacting a toll on Hong Kong’s economy and tourism – the Asian financial hub is on the verge of its first recession in a decade.

Protesters were gathering peacefully at the suburban Yuen Long mass-transit rail station, one of a series of running demonstrations over 11 weeks that have sometimes turned violent, including the storming of the legislature and havoc at the airport.

On the night of July 21, about 100 white-shirted men stormed the station hours after protesters marched through central Hong Kong and defaced China’s Liaison Office – the main symbol of Beijing’s authority over the city.

The men attacked black-clad protesters returning from Hong Kong island, passers-by, journalists and lawmakers with pipes and clubs, wounding 45 people.

Anger erupted in June over a now-suspended bill that would allow criminal suspects in Hong Kong to be extradited to mainland China for trial. Hong Kong leader Carrie Lam said again on Tuesday the legislation was dead.

Consulate Worker Detained

But the unrest has been fuelled by broader worries about the erosion of freedoms guaranteed under the “one country, two systems” formula adopted after Hong Kong’s return to China in 1997, including an independent judiciary and the right to protest.

In the most recent cause for concern, a Chinese national working at Britain’s Hong Kong consulate has been detained in China’s border city of Shenzhen for violating the law, probably worsening already strained ties between Beijing and London.

The protests have prompted sharp reactions from Beijing, which has accused foreign countries, including the United States, of fomenting unrest. China has also sent a clear warning that forceful intervention is possible, with paramilitary forces holding drills in neighbouring Shenzhen.

U.S. Secretary of State Mike Pompeo reiterated US calls for China to honour its “one country, two systems” commitment.

Speaking to CBS This Morning, Pompeo highlighted weekend remarks by President Donald Trump warning against a crackdown like Beijing’s suppression of pro-democracy protests in Tiananmen Square in 1989.

Trump said this would make reaching a deal he has been seeking to end a trade war with China “very hard”.

In an editorial on Tuesday, China’s influential state-run tabloid, the Global Times, called Monday’s comments by U.S. Vice President Mike Pence linking the trade talks to the Hong Kong protests “outrageous”.

Former U.S. Assistant Secretary of Defense for Asian and Pacific Security Affairs Wallace Gregson said Hong Kong looked like a “burning fuse”.

“The camouflage that Hong Kong could be an economic city where politics remained somehow suspended in pursuit of business has been brutally rubbished,” he said at an event in self-ruled Taiwan, which Beijing considers it’s own.

“The question seems to be whether this will be Tiananmen II, or something like Hungary in 1956 and Prague in 1968, or optimistically Berlin on November 1989, when the Wall fell.”

U.S. tech giants Twitter Inc and Facebook Inc have said they dismantled a state-backed social media campaign originating in mainland China that sought to undermine the Hong Kong protests.

Chinese Foreign Ministry spokesman Geng Shuang declined to comment directly on the Twitter and Facebook actions but defended the right of Chinese people to make their voices heard.