HALF a year on from pro-democracy protests that gripped Hong Kong for weeks, the city’s economy is—depending on your perspective—beginning to suffer the fallout or sailing along as if nothing much happened. A tale of two property markets sheds light on this. At one end of the spectrum are retail spaces. Hammered since the unrest by a slowdown in the growth of visits from the mainland, shop rents are expected to fall by as much as 20% this year. At the other end are offices. Buoyed by a series of new financial links with the mainland, vacancies in Hong Kong’s forest of glass-and-steel towers are at their lowest since the onset of the global financial crisis. The common thread is evident: more than at any point since the end of British rule in 1997, Hong Kong’s economic fate depends on mainland China.
That Hong Kong should be so interwoven with the rest of China might not seem surprising. It is, after all, a city of 7m people controlled by a country of 1.3 billion. But, as well as being administered under a separate political system, Hong Kong has long maintained a measure of economic distance from the mainland. Its currency is still...Continue reading
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