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The annual Hong Kong Brands and Products Expo opened on December 10, for the 54th time since 1938, and will run until December 31. The number of exhibitors has fallen from 435 in 2018 to 323

this year. Exhibitors have been given a discount of 30 per cent on their rent. It is an apt symbol of the city’s economy after seven months of street protest — down but not out. Two people

have died during seven months of protests. For businesses and residents, the nightmare scenario is this: with the Beijing and Hong Kong governments not agreeing to the demands of the

protesters nor negotiating with them, some people may decide to move from stones and Molotov cocktails to bombs and guns. That would be a game-changer. Tourism, retail, exhibitions, meetings

and sports events have taken a big hit, but core sectors like finance, the stock exchange, law, accounting, shipping, manufacturing and export/import have been little affected. Economists

estimate the cost of the protests at two per cent of GDP. The Financial Secretary Paul Chan Mo-po said this month that the city would record its first fiscal shortfall for 15 years. The

government has announced more than HK$25 million (£2.4 billion) in relief measures for the firms worst hit by the disturbances. In 2018, the city’s budget had a surplus of HK$16.8 billion.

On December 10, Joerg Wuttke, president of the European Union Chamber of Commerce in China, said that he was struck by the optimism of foreign companies in Hong Kong. “If the situation gets

tough again, with demonstrations and tear gas, you have to relocate meetings to safer areas away from Central, that’s not good,” he said. “I guess that most of these firms, definitely big

ones, are looking into contingencies. If the situation gets worse and there are serious confrontations, do we move to Singapore, Shanghai, Shenzhen and Guangdong?” A survey by the Hong Kong

Retail Management Association published on December 9 found that, over the next six months, retail firms will lay off more than 5,000 people, with 7,000 company closures. “This is the worst

on record,” said Annie Tse Yau On-yee, chairwoman of the association. “We don’t know when it will get to the bottom, as it is uncertain when peace will be restored to society. Even if it

stabilises, it will be a long road before Hong Kong rebuilds its international reputation and tourists return.” In October, retail sales fell 24.3 per cent year on year and tourist arrivals

dropped 43.7 per cent. That’s the biggest fall since May 2003 and the outbreak of SARs. The biggest source of tourists is mainland China. Media coverage of the protests in China, where

information is tightly controlled, has been uniformly negative; footage has concentrated on fighting, tear gas, and attacks on businesses apparently linked with China. To protect themselves,

branches of banks and other China-owned businesses here have begun barricading their premises. Protestors have divided firms between “blue”, said to be supporting the government — and

“yellow”, supporting the protests. They urge people to patronise only yellow firms. This call has had some impact. Many major sports events have been cancelled because of the protests, such

as the Open tennis tournament, the Formula E-Prix, the Squash Open and the Asian Aquathlon Championship. The picture is not entirely dark. This year, Hong Kong is on course to be the biggest

market in the world for Initial Public Offerings (IPOs), with 160 raising a total of HK$307.8 billion, including e-commerce giant Alibaba Group Holding and Budweiser Brewing Company APAC.

Accounting giant KPMG forecasts a similar number of IPOs next year, also raising about HK$300 billion. David Leung, who works in the trading department of a European bank in Hong Kong, said

the protests had not affected his bank’s operations. “The main issue for management is to keep the peace between our Hong Kong and mainland employees. Their views on the protests differ

drastically. So far we have not had major disputes within the bank. The protests are carefully targeted. They have not touched finance, except financial institutions owned by the mainland.”

Most of the protests occur at the weekends. Walk through the main business and commercial districts on a weekday and the streets are as busy with people and vehicles as usual. The city’s

subway is crowded. The most popular entertainment remains horse racing. Despite the protests, the Hong Kong Jockey Club has cancelled only two race days this year. On December 8, it held the

Longines Hong Kong International Races, with nine Japanese horses taking part. The races were broadcast to a potential 44 million homes in Japan. Attendance was 27,965, down from 96,388 at

the same event in 2019, but betting reached a record HK$1.71 billion. The protests have not led to an exodus of residents. “Perhaps some short-term visitors have left,” said Wong Sau, an

employee of a government radio station. “Long-term residents are staying. They can avoid the protests if they wish and continue the life they had before.”