Hong Kong protest boom for protection gear businesses begins to tumble

Businesses selling protection gear have enjoyed a boom in sales. (Reuters)
Updated 15 August 2019

Hong Kong protest boom for protection gear businesses begins to tumble

  • Behind the tear gas, flying bricks and transport disruptions there are bigger factors at play, such as shrinking global trade volumes and a slowdown in demand from mainland China

BEIJING: John Lam’s safety equipment shop has been spared the global downdraft shaking Hong Kong’s economy. In times of crisis, businesses providing basic necessities tend to fare better.
In Lam’s case, that means hard hats, filtered masks, goggles and other gear that millions of anti-government protesters taking to the streets in the past two months bought to protect themselves as clashes with police turned increasingly violent.
“Many people are willing to save a meal in order to buy some protective equipment, especially students,” Lam said inside his Shing Fat Safety Products shop in Yau Ma Tei, a working class commercial area of the city.
“Usually unnecessary items for civilians have become the necessity of the moment.”
Lam, who opposes the violence that has marked many of the protests, said sales had “doubled or tripled” since early June.
At times, he could not replenish stocks fast enough to meet demand. Some customers were buying 50 items at once. But lately, in a sign of saturation, demand has been easing. The reality of a slowing economy is also kicking in.
Behind the tear gas, flying bricks and transport disruptions there are bigger factors at play, such as shrinking global trade volumes and a slowdown in demand from mainland China.
Those trickle through into all aspects of the economy, including the construction industry — Lam’s core customer base.
“Although our business has improved lately, it does not mean that the economic downturn will not affect our business next month,” Lam said.
Indeed, the problems facing Hong Kong’s wide-open economy — which is expected to grind to a halt in coming quarters — run so deep that even those businesses whose products have been repurposed as protest paraphernalia are losing momentum.
Joe Chan, director of Many Stationery & Book Centre Co in the Sham Shui Po, a neighbourhood that has been the scene of protests and has been soaked in tear gas multiple times, said sales of Post-It notes are up 20 percent. Protesters have been using them to cover walls with part-art, part-political messages across the territory.
But his more important clients, event organisers who use stationery as promotion materials, are now few and far between. Overall, revenues are down 10 percent.
“This year they cancelled, or delayed,” Chan said, referring to orders.

FASTFACT

Hong Kong became a Special Administrative Region of the People’s Republic of China in 1997.

Emily Tam, store manager of Baleno, a clothing shop in Causeway Bay, said stocks of black T-shirts, the unofficial uniform of the protests, ran out on a daily basis in June and July.
But over the past two weekends, the shopping district witnessed violent clashes and barricaded roads. Her shop closed early and since then it has seen fewer customers.
“We’re getting close to the red line that means business losses,” Tam said.
Across the road, a seller surnamed Hui at a Watsons pharmacy says her store often runs out of cooling pads, surgical masks and other supplies that protesters use. But sales of other, more expensive items, such as cosmetics, are dropping.
“Surely we are also experiencing an overall economic downturn. And when there was tear gas, we shut the door,” Hui said.
The economy has become a focus for a public relations battle between authorities and protesters.
As a city-wide strike kicked off last week, government officials said protests were scaring high-end shoppers and tourists away, threatening growth.
Protesters are blaming the downturn on the fact that Hong Kongers have little control over public policy in the absence of universal suffrage.
They say the government spends too many resources on Beijing’s priorities, such as developing a “Greater Bay Area” around the Pearl River Delta, and it is not doing enough to solve income inequality and a housing shortage.
Chan Chi Ming, 60, at Shing Cheong Stationery & Books Ltd, in Sham Shui Po, agrees with the government. He is losing business and hopes police “arrest thousands.”
But Hungry Dino owner Tracy Tang sees it differently. She has been handing out discounted rice balls to young protesters after hearing some skipped dinner amid family feuds over their participation in the movement.
“If we say that the economic deterioration is all related to the protests, it is extremely unfair,” Tang said. “We should shift the question to why youngsters are sacrificing themselves.
“As Hong Kongers with a conscience, we feel heartbroken for what has happened in the past two months. It has already affected the economy. But we will still offer discounts and high-quality food to Hong Kong people.”


Oil recoups losses as OPEC, US Fed see robust economy

Updated 14 November 2019

Oil recoups losses as OPEC, US Fed see robust economy

  • US-China trade deal will help remove ‘dark cloud’ over oil, says Barkindo

LONDON: Oil prices reversed early losses on Wednesday after the Organization of the Petroleum Exporting Countries (OPEC) said it saw no signs of global recession and rival US shale oil production could grow by much less than expected in 2020.

Also supporting prices were comments by US Federal Reserve Chair Jerome Powell, who said the US economy would see a “sustained expansion” with the full impact of recent interest rate cuts still to be felt.

Brent crude futures stood roughly flat at around $62 per barrel by 1450 GMT, having fallen by over 1 percent earlier in the day. US West Texas Intermediate crude was at $56 per barrel, up 20 cents or 0.4 percent.

“The baseline outlook remains favorable,” Powell said.

OPEC Secretary-General Mohammad Barkindo said global economic fundamentals remained strong and that he was still confident that the US and China would reach a trade deal.

“It will almost remove that dark cloud that had engulfed the global economy,” Barkindo said, adding it was too early to discuss the output policy of OPEC’s December meeting.

HIGHLIGHT

  • US oil production likely to grow by just 0.3-0.4 million barrels per day next year — or less than half of previous expectations.
  • The prospects for ‘US crude exports had turned bleak after shipping rates jumped last month.’

He also said some US companies were now saying US oil production would grow by just 0.3-0.4 million barrels per day next year — or less than half of previous expectations — reducing the risk of an oil glut next year.

US President Donald Trump said on Tuesday Washington and Beijing were close to finalizing a trade deal, but he fell short of providing a date or venue for the signing ceremony.

“The expectations of an inventory build in the US and uncertainty over the OPEC+ strategy on output cuts and US/China trade deal are weighing on oil prices,” said analysts at ING, including the head of commodity strategy Warren Patterson.

In the US, crude oil inventories were forecast to have risen for a third straight week last week, while refined products inventories likely declined, a preliminary Reuters poll showed on Tuesday.

ANZ analysts said the prospects for US crude exports had turned bleak after shipping rates jumped last month.