04 September 2019

 

Full Report

Predictions

  • Carrie Lam’s concessions to Hong Kong protesters unlikely to end demonstrations, and sporadic violence will persist during coming month
  • Unrest will continue to affect central areas and business districts, impacting international firms and travellers
  • Police will likely step up level of aggression against protestors, ensuring further violent street clashes likely even as protest numbers decline

Analysis

Carrie Lam, Hong Kong’s Chief Executive, said on 4 September that she would withdraw the Government’s controversial extradition bill, opposition to which triggered the start of ongoing protests. However, she effectively rejected demonstrators’ four further key demands, including for the release of detained protesters, an independent inquiry into police actions during demonstrations, and universal suffrage for Legislative Council and Chief Executive elections. However, she added that the Government will hold an independent investigation into social issues seen as contributing to the protests and hold dialogues with local communities. Her move followed significant violence over the 31 August weekend, which saw activists throwing petrol bombs and vandalising metro stations, while the police used water cannon against demonstrators and fired live warning shots into the air at Victoria Park. Meanwhile, official data showed that Hong Kong’s economy shrank by 0.4% between April and June, partly prompting the Government to announce a USD 2.4 billion support package on 15 August.

Opposition to the bill, which would have facilitated extraditions to the mainland, caused activists opposed to Beijing’s efforts to increase its influence over Hong Kong to launch protests in March. Lam’s withdrawal of the bill followed the publication on 2 September of a leaked recording in which she said she would stand down if possible, which significantly weakened her authority. She therefore withdrew the bill in an attempt to regain the initiative, reduce support for protesters, and restore her own credibility, even though she had previously said she would not take this step. Her move also reflects a recognition that her strategy of waiting for protests to dissipate has failed. This was highlighted when several hundred thousand people marched from Causeway Bay to Central on 18 August, the highest attendance at a rally since June, and at least 10,000 secondary school students boycotted the first day of the school term on 2 September. Lam’s attempt to end the unrest also reflects business concerns – supported by the recent poor growth figures – that the unrest is damaging Hong Kong’s economy.

Lam’s decision will cause many demonstrators to conclude that their protests were successful in forcing the Government – and its backers in Beijing – to make a significant concession, even though this is a largely symbolic victory as Lam had already previously said that the bill was “dead”. Some citizens will therefore see the bill’s withdrawal as evidence that no further action is needed. However, many protestors, including the most committed anti-Beijing activists, will likely feel emboldened to push for similar concessions on their four remaining demands. However, the Government will be extremely unwilling to do so. In particular, Beijing will urge the Hong Kong authorities to resist calls to establish universal suffrage, release detainees or permit independent oversight of the security forces, for fear that this will establish a precedent including for mainland China.

As a result, demonstrations are likely to continue in the coming weeks, including in central areas and business districts, leading to further disruption to business. The Government, for its part, will now be able to argue that by meeting the initial demand that triggered recent unrest, it has the right to move more strongly against any further demonstrations. Indeed, Lam’s 4 September statement promised to strictly enforce the law against “all violent and illegal acts”. As a result, while the bill’s withdrawal means that protests will be smaller-scale than in recent weeks, there is the strong likelihood of police using more robust measures against demonstrators, which will in turn cause activists to respond aggressively, potential leading to renewed and even increased street violence.

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