Under the same umbrella
- Document type
- Harding, Rebecca
- Delta Economics
- Date of publication
- 7 October 2014
- Trade View. 7 October 2014
- Trends: economic, social and technology trends affecting business
- Business and management
- Material type
Delta Economics weekly trade views anticipate and analyse forthcoming key economic data from Deltas unique trade perspective. This report is on ‘why Hong Kong protests will not have a lasting economic impact’.
There has been a downward correction in the Hang Seng since July, although this is more likely to be because of wider economic conditions in Asia than specifically the protests in Hong Kong. The correlation between the Hang Seng Index and Hong Kong’s exports is 0.823. This is very high and given a forecast decline in monthly trade export values up to 2015, suggests that the correction that we are currently seeing may have some way to go. However, as can be seen quite clearly from the chart within the report, these corrections are cyclical. Delta Economics expects exports in November 2014 will be 1.3% below their 2013 values. By January and February 2015 they will be similar to their levels 12 months earlier – unimpressive growth, but growth nevertheless.
The reason why the protests will have little impact on trade is the very reason why there are protests in the first place: the Umbrella Revolution’s purpose is to point out to the world generally, but China in particular, that it has the right to democracy as a counterpart to the free market and free trade system that it has built. It is not questioning the symbiotic economic and trade relationship with China, merely saying that the logical political consequence of a free market economy is the existence of a democracy.
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