For the second straight day, ongoing protests in Hong Kong have disrupted flights at Hong Kong International Airport.
What Happened?
A mass of pro-democracy protesters crowded the Hong Kong airport over the weekend, forcing the airport to cancel all of its departing flights on Monday and Tuesday. An estimated 5,000 protesters have gathered at the airport over the past five days, and police have arrested or detained around 600 people.
Chinese officials said a handful of the protesters were committing “deranged acts” and attacking police officers in what it deems as “the first signs of terrorism.” A spokesperson for the government said violent protesters must be punished “without leniency, without mercy.”
On Tuesday, Chinese propaganda outlets released video of military vehicles gathering near the borders of Hong Kong and said protesters are “asking for self-destruction.”
Why It’s Important
Hong Kong International Airport is one of the eight busiest airports in the world by traffic volume, servicing more than 72 million travelers per year. The timing of the shutdown is particularly bad for the Chinese government, which is already dealing with economic pressures from the ongoing trade dispute with the U.S.
The protests have been underway for several months now, but Monday marks the first time flights have been disrupted. Economists have already cut Hong Kong growth estimates into negative territory for the third quarter due to the economic impact of the protests. A second consecutive quarter of negative growth would push Hong Kong into a technical recession.
The iShares FTSE/Xinhua China 25 Index FXI was down another 0.8% on Tuesday and is now down 9.1% in the past month.
CNBC’s Jim Cramer said Monday the Hong Kong protests may be more important for investors than the trade war.
“This is more serious than the trade talks,” Cramer said. “If you want to know what could tip you into a worldwide recession, it is just a shutdown of Hong Kong.”
What’s Next?
Investors will be watching to see how the Chinese handles the ongoing protest and whether or not threats of arrest are enough to discourage protesters. Investors can track the protests via a Washington Post live stream of the Hong Kong airport here.
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