By Jeffrey Cheng
Since the Occupy Central movement in 2015, tensions have been building up in Hong Kong. In 2019, pro-democracy supporters snapped into full action when the government pushed for the extradition bill. Millions of people took to the street to protest against the proposed bill. During the massive protests, the police and the government, the Department of Justice, in particular, have reportedly suppressed protesters through violent and unjust acts, raising concerns over an abuse of power. As protesters made major demands of the government, 'five demands, not one less' became their main slogan.
The five major demands are:
1) Full withdrawal of the extradition bill
2) Independent commission of inquiry into allegations of police brutality
3) Retracting the classification of protesters as 'rioters' 4) Amnesty for arrested protesters
5) ‘Dual Universal Suffrage’ for both the Legislative Council and the Chief Executive
Following three months of protests with alleged unlawful detainment and suspicious deaths of protesters, the government announced its decision to withdraw the controversial bill in September. However, Chief Executive Carrie Lam has insisted there is no need for an independent inquiry into questionable police conduct.
The proposed extradition bill was the trigger of the widespread anger in the city. As a result of that, the district council elections later in November was taken as a de facto referendum, where the pro-establishment (pro-Beijing) camp won only 60 out of 452 seats. This marked a victory for the pro-democracy camp and signified an acknowledgement of the five demands. However, the government's stance remained the same, dismissing the need to address the remaining four demands of the protesters.
The persistence of the protests led to the birth of the 'yellow economic circle'. It is an action, stance and punishment that reciprocate the level of anger, disappointment and frustrations people have towards the government and the pro-establishment camp. By economic definition, the ‘yellow economic circle’ is a discriminatory action against businesses that do not share the same political stance. Pro-democracy supporters have absolute preference over shops and restaurants that support the protest movement and boycott those that take the opposite stance. This behaviour soon became widely popular, and netizens began to create a directory of pro-democracy shops and restaurants, called the 'Michulin' guide.
Hong Kong has not seen such large-scale social unrest since 1967. In a tough time like this, we can see startups and SMEs are struggling to comprehend and adapt to these political stresses, which gives us the thought of sharing our two cents with you.
How does this affect my startup?
- The opportunity cost associated with the protests is real, and Hong Kong’s economy is already taking a hit. Hospitality and tourism are certainly the most affected industries. Next comes professional services whose clients come mostly from mainland China, for example, financial services and education services.
- Retail has also taken a massive hit due to the obstruction of public areas during the protests and travel inconvenience caused by early closure of public transport. Safety concerns over escalating violence also forced most retail outlets to close their doors.
- With difficulty comes opportunity, especially for online businesses that have gained promising tractions during the protest movement. For example, an education startup, and an Ooosh member, Protostar has told us about the increase in enquiries and revenue from their online courses that target local students.
-Due to the unpredictable mass transport service breakdown, the team might take longer than expected to the office. Instead of working from home, you will be able to get a 24/7 access to both Kowloon & HK Island spaces anytime day and night from joining the Contingency Office Plan. This alternative allows you to have a flexible work station and proper office facilities without delaying work process during difficult times. -The inevitable impact on team morale and productivity caused by disturbing images and videos of the protests means that you need to be more sensitive to your team’s emotions. As a leader, no matter which side you take, you need to give those who have been emotionally affected some room to breathe and someone to talk to. Even if you feel you are not the right person to help, allow them to talk about it with their peers and encourage them to let their emotions out. Do not suppress their emotions.
Inevitably, my business will have to take a political stance?
This is one of the trickiest questions and there is no absolute answer.
For startups, we believe one of the primary reasons for starting a business is to have the freedom to voice out and act according to your will. No matter which political stance you take, you have the right to take whichever stance as long as you are prepared to hold yourself accountable for the potential consequences.
The tricky thing is, co-founders and business partners are often caught up in a tangle of conflicting stances. We have witnessed businesses being boycotted by supporters of the ‘yellow economic circle’ after one of the partners openly revealed a pro-establishment stance, while other partners are indeed supporters of the pro-democracy camp. Some of these businesses eventually closed down.
The solution is simple but not easy to achieve - talk it out amongst yourselves.
As far as we have observed, it is not necessary for a business to proactively declare its political stance. Staying neutral is an option as long as you are off the radar.
What would get you onto the netizens’ radar, especially if you are a retail business, is the opinion and comments that your staff are sharing openly. It is important to establish a code of conduct and protocol to outline behaviour expectations for your staff.
What to do if you are on the radar?
Some businesses who support the pro-establishment camp attempt to rebrand themselves or even pretend to take the pro-democracy stance, but that can be risky as today’s netizens are very capable of background searches. If you are on the radar, hire a PR crisis expert to come up with a strategy for you. But if you are a supporter of the opposite camp, here is a list of some things you can do to show your pro-democracy stance:
- Offer discounts to protesters, especially students and journalists
- Put up a ‘Lennon Wall’ inside or outside the shop or restaurant
- Participate in strikes during the protests
- Share your political stance on the extradition bill on social media
- Hire pro-democracy supporters or protesters
- Provide shelter to protesters during emergency
- Stop broadcasting pro-Beijing television channel TVB in the shop or restaurant
- Donate supplies to protesters in need
Just a further note on this, pro-democracy supporters are very sensitive and they value actions more than declarations. Show them your genuine support, and they will reciprocate with their support for your business.
Perhaps you are wondering if taking a neutral stance is an option?
Unfortunately, when you are called upon, declaring yourself as neutral is now taken as a pro-establishment stance.
Is it still safe for expats and foreigners to run a business in Hong Kong?
In terms of running a business in Hong Kong, the government has dismissed rumours on its intention of placing Hong Kong under curfew. They have also reassured the business community that there will be no change in Hong Kong’s financial policies. On the other hand, there is no sign of Beijing revoking the ‘one country, two systems’ framework either. Hence the rule of law is still intact when it comes to business activities.
This leaves us with operational risks in Hong Kong, where we share both challenges and opportunities in an unstable environment like this. If your business has foreigners and expats in the target audience, you will likely take less hit on the ‘yellow economic circle’ radar.
In short, Hong Kong is still a safe place to run your business, considering its rule of law remains intact. It is still the financial centre of the world and Asia’s business hub. One downside about living here at this time is perhaps the inconvenience that comes with the protest movement, but Hong Kong is showing a whole new side of its face in the past seven months, which is something worth witnessing if you support human rights and democratic values.
Politics and current affairs go hand in hand with our economy; hence we thought it might be useful for us to share our observations through these seven months with you. We hope this article can give startup founders and SME owners a glimpse of what has been happening in the market and demystify the worries you may have in these unsettling times.