Thursday 31 October 2019 9:40 am

Hong Kong falls into recession amid ongoing unrest

Hong Kong has officially entered a recession for the first time in a decade after the its economy contracted for a second successive quarter, as the territory prepares for Halloween protests.

The financial hub’s economy shrank by 3.2 per cent in the three months to the end of September, much more than the 0.6 per cent contraction that had been estimated.

Read more: Carrie Lam: Hong Kong set to record negative growth in 2019

This contraction represents the first time Hong Kong has entered recession since the financial crisis in 2009.

Hong Kong has been wracked by often-violent anti-government protests in recent months. Demonstrations that escalated in June over a proposed bill that would have allowed suspects to be extradited to mainland China have evolved into calls for greater autonomy from Beijing.

The city’s police force has tightened security ahead of possible clashes between masked protesters and Halloween clubbers as demonstrators prepare to target Hong Kong’s famous party district for the first time.

The police, which have been accused of violence towards protesters, have banned the march and have said they will close roads in order to “facilitate the public celebrating”, Reuters reported.

Police are reportedly planning to deploy 3,000 riot officers and three water cannon outside government offices near the march’s planned route.

Hong Kong’s chief executive, Carrie Lam, said earlier this week that she was expecting the city to record negative economic growth in 2019.

Lam’s comments came shortly Paul Chan, the territory’s financial secretary, said Hong Kong had fallen into recession and was unlikely to achieve any growth this year.

Retail sales and tourism have plummeted in the territory amid the ongoing protests, which have plunged Hong Kong into its worst political crisis for a decade.

Protestors are angry about what they view as increased Chinese interference in the city and an erosion of the freedoms granted it under the “one country, two systems” framework under which it is governed.

Charles Li, head of the Hong Kong stock exchange (HKEX), has publicly questioned the framework governing the territory’s relationship with mainland China.

Read more: Hong Kong stock exchange boss questions ‘one country, two systems’

In a speech in London earlier this week, Li said there had been “fundamental flaws” in how the model was implemented from the outset, and that Beijine had never trusted Hong Kong to respect the “one country” element of the framework.

Li’s remarks come shortly after concerns about HKEX’s independence from Beijine helped scupper its unsolicited £32bn bid for the London Stock Exchange.

Main image credit: Getty

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