What effect will it have on the economy?

By now most people know the situation in Hong Kong. Thousands are protesting for greater democratic rights. The protests have been going on for almost a week and  I wanted to know how it has affected or will affect the economy. The protests have certainly affected the local economy because of the blockage of roads which is causing major delays in traffic. As a result, the protests have lost the support of some local business owners. Another immediate impact of the protests is the decline in the tourism industry which combined with the retail industry makes up to 10% of they’re gross domestic product. The fact that most businesses in Hong Kong have close relations with the mainland is causing adverse affects as well. With the mainland cracking down on corruption and the property market slowing down, the retail industry in Hong Kong is suffering. Combine that with the protests and it has been a sharp decline the past week. If the mainland were to intervene, then China’s economy would suffer. They would be seen as unstable therefore losing foreign investment in the country. Although the protests are for good reason, they are not without consequence.

Sources:

http://www.bloomberg.com/news/2014-10-04/economic-cost-spurs-some-in-hong-kong-to-oppose-student-protests.html

http://www.businessweek.com/articles/2014-09-30/hong-kong-protests-trigger-new-worries-for-chinas-economy