Demonstrators in Hong Kong reached out to mainland Chinese citizens on Sunday, a new frontier after 15 weeks of turmoil here. A throng marched through "tourism central" in Tsim Sha Tsui, Kowloon. The marchers were destined for the high-speed rail terminus that's the starting point for trips to China.
The route through some of the highest-spending streets in the city -- past showcase stores for Louis Vuitton, Fendi, Coach and Cartier -- is a departure from prior demonstrations. Previously, they all led to the government headquarters, which are on Hong Kong island. This was the first attempt to influence thought across the border, on the Kowloon peninsula, which is actually a tip of China proper.
Mainlanders are alternately bemused, amazed and irritated by their uppity next-door neighbors. It's a common sentiment among mainland Chinese that since you don't make any money out of marching, and voting democratically won't make you richer, why bother?
One of my business contacts from the mainland, who lives in Hong Kong, recently asked me about the protests taking place later that day.
"They're in support of the police, right?" she asked, a bit hesitantly. "Eerm, I don't think these are for the police, no," I told her gently, admitting there had been a small gathering like that the day before. Later that day, half a million people marched for democracy. A hundred or so hard-core demonstrators broke into the Legislative Council building, equivalent to the Capitol, and smashed the place up.
"All these protests, they're inconvenient, aren't they?" she tried again. I left it at that. Yes, the protests disrupt bus routes, and make it hard to go to the shops. This is how Xinhua, the mainland news agency, often reports on demonstrations. Let's forget what they're for.
We are starting to see reports that Hong Kong is suffering economically as a result of its pro-democracy demonstrations. "Hong Kong protests hit city where it hurts -- in the wallet," according to the headline on a story today in the South China Morning Post, which is now owned by pro-China Alibaba (BABA) tycoon Jack Ma.
Hong Kong has been beside itself with protests since the first major march on April 28. While organizers estimated that crowd at 130,000, the numbers rose to a million on June 9, and almost 2 million people took to the streets on June 16.
The political unrest "has soured shoppers' appetite for spending," the SCMP tells us, damaging retail sales and adding to the city's economic woes.
It is true that Hong Kong's retail sales are suffering. They've fallen for four months straight, from February through May, and are unlikely to have broken that pattern in June.
But that means sales have been declining since well before the protests even began. The greatest decline came in February, in fact, with a double-digit year-on-year drop of 10.2%. The drastic dropoff coincided with maximum fear over the U.S.-China trade war.
I would argue that Hong Kong's demonstrations are good for business. The city is fighting for its future. It's a sign of the city's well-protected freedoms, of speech, assembly and political thought, that they're allowed to go on.
I doubt those millions of people in the streets have really given any rich shopper second thoughts about buying big-heeled Balenciaga sneakers. (The Triple S clear-sole air-bubble kicks are a positive bargain at just $1,105 -- yes, that's in U.S. dollars -- in Hong Kong, in case you're interested).
So it's great that the protests on Sunday were made with one eye on appealing to mainland visitors. Some were shocked at what they were seeing.
"We would never be allowed to do something like this in the mainland," Liu Li, a baker visiting Hong Kong for the first time, for some shopping, told The New York Times. "Even if 100 people gather together, they would get detained."
Tourism to Hong Kong has been increasing leading up to the protest period, with tourist arrivals up 14.9% in the first five months of the year. Mainland visitors account for almost 80% of the travelers who come here. We'll see if they continue to come.
One teacher from Xinjiang, who says she's a member of the Communist Party, told the SCMP she was spending almost $3,000 in Hong Kong, on a trip to Hong Kong Disneyland and museums. She had been hoping to witness the handover celebrations on July 1, the date Britain gave the city back to China.
But she couldn't get anywhere close because the government shut off access to avoid demonstrators, who tried to disrupt the ceremony.
"I heard about the recent protests," she told the SCMP. "The 'One Country, Two Systems' principle is good, I do not understand why Hong Kong people complain about it."
It's precisely because the "One Country Two Systems" principle is not working, and is eroded virtually day by day, that people keep demonstrating. This Sunday's march was symbolic in ending at the high-speed train station. A little portion of the station is now technically Chinese homeland, turned into One Country in violation of that Two Systems agreement, with Chinese customs and immigration officials stationed there.
Critics have therefore called the high-speed line a "Trojan train." They see it as yet another encroachment into a free city. In Hong Kong, unlike the mainland, the soldiers of the People's Liberation Army are confined to their barracks, and plain-clothes security officers do not trail activists and reporters around.
If the now-shelved extradition law is reintroduced, expect far more self-censorship in this city. Who wants to run an analyst's report that risks crossing some unknown line that makes it a "state secret" in the eyes of the Communist Party?
China's Communist Party would rather all Chinese people got on with their business and their shopping, and left the question of leadership to the cadre of Communist officials who control decision-making. Those decision-makers, in absolute power, often see themselves or family members get fabulously wealthy in the process.
An entire team of investigative journalists at Bloomberg connected those dots back in 2013. They then got in hot water within the company for their story on the topic, which didn't see the light of day amid claims (which Bloomberg denied) that Bloomberg censored itself.
Five booksellers disappeared under various fishy circumstances, with one abducted from Thailand and another from Hong Kong, only to appear in China after months in solitary confinement. They confessed to trumped-up charges, basically of publishing books about the intimate affairs, business and otherwise, of the Communist leadership.
The incident has forced the business of selling banned books in Hong Kong, which previously flourished in the open, underground. Mainlanders are of course the prime buyers, desperate for any non-censored insight into their commanders.
China's leaders point to their handling of the economy as one of their strong points. Just look at the mess the West got into over the housing crisis, and the explosion of bad debt. Why do you want to rock a stable boat with tricky issues like democracy?
"Focus on your business, not ours," is the message from the mainland political elite. Go back to shopping.
We will see if these demonstrations hurt or help Hong Kong's reputation as a free city that's a good place for doing business into China. One reason mainland Chinese tycoons buy sky-high apartments here is that they feel safe from prying security-state eyes.
PricewaterhouseCoopers is still predicting a record year for initial public offerings in Hong Kong. With 200 companies lining up to go public in the city in the second half of 2019, total fundraising should approach $38.5 billion for the full year, or exceed that if market conditions are good.
Last year, companies going public in Hong Kong raised $36.5 billion. That was enough to make Hong Kong the world's most-active exchange for listings. Another good showing should see Hong Kong secure a position in the top three exchanges globally, and perhaps retain its spot.
It doesn't sound like business is going bad in Hong Kong. Only the politics. If the city remains free, expect business to thrive.