Recession Hits Hong Kong In Q3

Hong Kong crept into recession in the third quarter, data released by the city’s Census and Statistics Department shows.

What Happened

The Chinese autonomous region suffered a 3.2% loss in GDP in the third quarter compared to the earlier quarter that ended in June.

The city saw its GDP declined by 2.9% compared to the third quarter last year. The consumer spending on goods and services decreased by 3.5% in a similar comparison.

Protests and Trade War Take Toll

This is the worst economic growth Hong Kong has seen since the global financial crisis of 2007-2008, according to CNBC.

Hong Kong, which is the world’s third-largest and Asia’s largest financial center according to Global Financial Centres Index (GFCI), is wrought with both internal and external turbulence.

The protests in Hong Kong — over China’s increased interference in its matters — refuse to cease, even as the city’s leader withdrew the controversial extradition bill, which promoted the protests initially.

The U.S. and China trade war has also taken its toll in Hong Kong alongside the rest of the country.

The two largest global economies have said they are making sight, as the APEC forum, where the U.S. President Donald Trump and his Chinese counterpart Xi Jinping were supposed to sign part of the deal, has been canceled.

What’s Next

“We will continue to closely monitor developments on both the external and local fronts and formulate further relief measures,” Hong Kong’s financial secretary said in a blog post on Oct. 27. “Yet, these supporting measures could only slightly alleviate pressure of the trade and citizens.

“[To] fundamentally address the issue, we need concerted effort of the community… We need to restore social order, resume normal living of citizens and businesses operation, and create more rooms for rational dialogue,” he added.