Hong Kong protests hit local economy

With unrest and protests in Hong Kong now going into their fourth month, there are mounting concerns for the impact on Hong Kong's once mighty economy.

Our reporter Eugene Benson takes a look at some of the big picture economic figures to find out what's happening in Hong Kong.

Hong Kong was built on business. For more than a century, it has been a bustling centre for merchants and traders and bankers of all sorts.

But for the last three months, Hong Kong's economy has been reeling.

Since June, the streets have been flooded with protesters - and violence and chaos have followed. Some of the latest macro-economic numbers are shocking:

- Since July, more than $600 billion dollars of stock market value has been erased, and some are worried that property values could plummet.

- In July, retail sales by volume fell 13%, according to government figures. Retail sales by value, meanwhile, dropped 11%.

- Hong Kong's GDP is virtually at a standstill and many economists warn that this once robust and dynamic economy - could be heading towards recession.

Many wonder if the current turmoil is actually driving businesses away.

Andrew Barclay, co-founder of Accounting and Business Services Company Stepping Stone said business was becoming cautious.

“Whilst we've previously not had to explain the benefits of Hong Kong over other southeast Asian centres, now we are being asked more frequently why people should come to Hong Kong, there seems to be an awareness to the situation and a need for people to be reassured that its business is as usual.”

And that's purely something you have noticed since the protests kicked off in June?

“Absolutely there has been a material increase in the frequency we are asked those kind of questions.”

Hong Kong's economy was already taking a beating from the China-US trade war. Now, the protest crisis has taken things from bad- to worse.

Local business reporter Charles McDermid spoke to us about what the Hong Kong government is doing to pull the city's economy out of its nosedive.

“Hong Kong is worried about recession and that's what everybody is talking about now. And this was a concern even before the protests, which have hammered the economy. Recession was in the cards before that because of the trade war. And with the trade war that's been in decline. Now with the protests it's a whole other element. Just on Thursday financial secretary Paul Chan announced a $35Bil. That's a fund for small and medium sized businesses that they'll have access to, that's something people can apply for. Earlier in August he released $19bil, and these are directly because of the protests, because of what we've seen, the hits that the economy has taken. So the city is reacting, but then on the streets you see really alarming metrics. You see shops that are empty, you see tourism numbers down. I mean across the board you're seeing alarming trends and it's all heading towards a recession. The protests have been the worst thing at the worst time.”

Over the years, Hong Kong's economy has withstood many obstacles...including the Asian financial crisis in 1997 and the SARS outbreak in 2003.

But if these protests continue, it could be the biggest challenge yet.