Hong Kong shopping

HONG KONG — Renewed political tensions are simmering in this Chinese shopping hub with thousands of people marching over the weekend to protest Beijing’s intervention in the eligibility of two pro-Hong Kong independence lawmakers.

The most recent protest, which ended in the early hours of Monday morning, saw police use pepper spray on crowds and arrest four people. Two officers were also injured in the clashes, police said.

The trouble began on Oct. 12 when newly elected lawmakers Sixtus “Baggio” Leung and Yau Wai-ching altered the words to their swearing-in oath. The two first became prominent on the political scene during the 2014 Occupy Central protests and have spoken out in favor of Hong Kong independence.

Yau displayed a flag reading “Hong Kong is not China” and vowed allegiance to the “Hong Kong nation” while Leung crossed his fingers during his pledge. The oaths were deemed invalid and subsequent do-overs have not been granted. The Hong Kong government launched an unprecedented legal challenge saying that the two effectively declined to take their oath.

On Monday morning, China’s Standing Committee of the National People’s Congress declared, ahead of an official Hong Kong court ruling, that those with separatist views could not serve in the Hong Kong legislature.

While the political tensions recall the 2014 Occupy protests which paralyzed the city’s downtown, the retail impact, if any, seems to be limited.

Joseph Tung, chairman of Hong Kong’s Travel Industry Council said, “We do not see there is any problem. That area is not a tourist area but of course we do not wish these things to happen. One [negative] report may affect the visitors but I am still very sure that police have full control.”

The most recent protest blocked Connaught Road West and Des Voeux Road West in Sheung Wan, outside of the city’s main central business district.

But continuing flare-ups could undo the modest recovery in retail sales.

On Thursday, Hong Kong retail sales value for September came in above market expectations, contracting at a slower pace of 4.1 percent year-on-year compared with a decrease of 10.5 percent in August. It’s the slowest decline since February, a month that was boosted by Chinese New Year spending.

“Given the low base from last year, the slowdown in inbound tourism may be past the worst but overall arrivals are still contracting,” Julia Wang, China economist at HSBC said in a note published on Nov. 3. “Visitors from mainland China, which account for over 70 percent of total traffic, are still slowing at a faster rate than overall tourist arrivals.”

Overall tourist arrivals to Hong Kong declined 3 percent in September compared to the 9 percent drop in August.

Wang continued: “Therefore despite the improvement in September, the outlook over the rest of the year may remain challenging. Indeed, with a year-end Fed hike now looking more likely than before, it is possible that this will put more near-term pressures on tourist arrivals (given the strength of the Hong Kong dollar) as well as domestic consumption.”

A paper released on Nov. 1 by Hong Kong Polytechnic University’s School of Hotel and Tourism Management also underscored greater competition for Hong Kong from cities within mainland China.

“With Shanghai planning to offer ‘duty-free retail hubs’ in its free-trade zone, Chinese shoppers from the affluent Yangtze River regions may well decide to remain in the Mainland when shopping,” it said.

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