As tensions continue to flare in Hong Kong, the central government in Beijing is calling on protesters to consider the economic damage they are doing to their city. But while blocked roads and people skipping work are probably affecting the city’s output, the long-term stakes of the conflict far outweigh those immediate concerns, experts say.
Leung Chun-Ying, Hong Kong’s chief executive, said in a Sunday statement that the region’s “stable development depends on peace and law-abiding people.” And while he may have a point in the short term, experts said, the demonstrations would have to take a significant turn for there to be anything resembling a persistent negative effect.
“The short term is there are going to be some adverse market and economic impacts,” said Jamian Ronca Spadavecchia, the founder of Oxbow Advisory, explaining that there will likely be some perception of increased headline risk and local business instability from the protests.
But looking beyond that short period, Spadavecchia said he is generally optimistic that the protests won’t have a big negative impact.
“Hong Kong’s strength is in its institutions—the free flow of information, the rule of law—and all of those factors for its future success are in place,” he said. “Hong Kong will remain a pivotal and safe way to get China play.”
And, as CNBC has reported, Hong Kong could actually stand to gain economically if the protesters are successful in winning increased autonomy from Beijing. There is belief among many of the city’s elite that “the more interference there is from China, the more dangerous it is for Hong Kong’s long-term [economic] role,” said Derek Scissors, a resident scholar at the American Enterprise Institute.
In fact—despite Beijing’s and Leung’s claims—any persistent economic damage to Hong Kong from these recent protests would likely come from the government itself, experts said.
“What makes [Hong Kong] attractive as a global city and an international business center is that it is open—or at least more open,” said Patrick Chovanec, chief strategist at Silvercrest Asset Management. “If that’s compromised by however Beijing reacts to this, that would be a bad thing for Hong Kong.”