Canadian businesses in Hong Kong are growing anxious after more than five months of pro-democracy protests and violent clashes that have pushed the global financial hub into its first recession in a decade.
“Any business that’s been heavily impacted by the protests, it’s hit Canadians as well,” says Canadian Andrew Work, a long-time resident and current president of The Canadian Club in Hong Kong.
“You’ve got Canadians that are working in the restaurant business, working in events, hotels, everybody’s taking a hit.
“This is worse than SARS.”
Work is one of 300,000 Canadians living in Hong Kong — home to the largest diaspora and the biggest Canadian Business Chamber in any city outside of Canada.
Work works in Hong Kong’s bustling special events industry, but in recent months nearly all of his gigs have been cancelled.
“And so that’s a big hit on the income. And you multiply that across everyone in the events business, major events all over Hong Kong have been cancelled, one after the other,” Work says.
“People are staying home a lot more.”
The number of visitors from mainland China, Hong Kong’s largest source of tourism, has dropped by one third since the political crisis escalated last summer. Visitors from Canada also fell by 26 per cent in September and Canadian universities have strongly advised their exchange students currently in Hong Kong to leave.
“If you’re a Canadian business that is involved with hotels, entertainment, retail, pharmaceuticals, anything to do with consumer goods or your business relies on the local economy in Hong Kong, I think these are very difficult times,” says Jesse Goldman with the international trade team at Borden Ladner Gervais LLP.
“The economic conditions there are probably the worst they’ve been since the 1997 crisis, if not worse.”
Fortunately, the majority of Canadian businesses in Hong Kong are in the finance and insurance sector, which has remained relatively unscathed, according to Todd Handcock, president of the Canadian Chamber of Commerce in Hong Kong.
“Canadian companies use Hong Kong as a hub,” Handcock says.
“Although they’re not immune to the disruption, they are buffered to an extent, because the city only comprises one part of their Asia-Pacific operations and many are continuing to see robust business across the rest of the region.”
But Goldman says even those in the financial sector worry that if the protests continue, Beijing may soon decide to crack down on the semi-autonomous city.
“I think we’re in uncharted waters. A lot of the protesters are obviously quite concerned about that. And I don’t think it’s outside the realm of possibility,” he says.
“The rule of law is fundamental to business confidence and business investment. If that changes…that will be potentially the unraveling of Hong Kong as we know it as a financial and business hub.”