City enters steep economic downturn . . .
Hong Kong’s gross domestic product (GDP) has slumped by 8.9 per cent in the first quarter of 2020. This decline exceeds that of the last major crisis—the 1998 Asian Financial Crisis, when GDP shrunk by 8.3 per cent. While the Hong Kong government’s efforts to contain the epidemic have been effective, the combination of the epidemic’s persistence abroad and the ongoing trade war between China and the U.S. is raising uncertainty regarding the prospects of a speedy economic recovery. U.S. tariffs on Chinese exports are likely to hurt Hong Kong’s economy, which relies on exports of Chinese goods via Hong Kong and manufacturing in China at companies owned by Hong Kong-based businesses.
Political tensions take a downward turn . . .
The lingering political conflict between the Hong Kong government and anti-government protesters adds to the uncertainties about the prospects of an economic recovery. The government refused to allow the annual May 1 Labour Day trade union rallies to take place, citing social distancing concerns. Protesters ignored the warning and resumed their protests anyway. The police used pepper spray to disperse them. The arrest of 15 moderate democracy activists in late April also has aggravated political tensions. Pro-democracy legislators and activists continue to blame China for interfering in Hong Kong affairs and for leveraging social distancing guidelines as an excuse to suppress political activism. The upcoming high-stakes elections to Hong Kong’s Legislative Council in September are likely to also be mired in political tensions.
Canada gets drawn into the conflict . . .
Canada, along with the U.S. and other countries, has condemned the arrest of prominent pro-democracy activists. In addition, 50 Hong Kong citizens who participated in the pro-democracy demonstrations have applied for asylum in Canada, 46 of whom submitted their applications between January 1 and March 31, 2020. This poses a challenge for Canada as it seeks to navigate its strained relations with China while securing a stable and high-quality supply of personal protective equipment from China. Nevertheless, the safety of the Hong Kong activists and their families as well as the erosion of political freedoms in Hong Kong should be of concern to Canadians.
READ MORE
- The Globe and Mail: Hong Kong protesters seek refuge in Canada
- South China Morning Post: Anti-government protests return to Hong Kong on Labour Day as police pepper spray crowd
- South China Morning Post: Coronavirus: Hong Kong’s economy slumps 8.9 per cent in worst contraction on record
