Wrong Kong Conclusion

Conclusion

For now, China can’t crush Hong Kong. It would be an international disaster that would force even the most venal Western countries to impose strong sanctions.

It also can’t give in to Hong Kong protestors’ demands. That would set the precedent that taking to the streets forces change. The Chinese Communist Party won’t let 7.5 million people jeopardize its lucrative rule over 1.3 billion.

But this is what it can do: Let Hong Kong die on the vine.

Hong Kong is less than a third of the population of Shanghai, and wouldn’t even make it into a list of the ten biggest Chinese cities. Its stock market is a handy way to raise capital – but Chinese companies can go to London or New York if they can’t find funds on the increasingly dynamic domestic (non-Hong Kong) exchanges.

About 6 months before the protests started, I helped my wife’s company with a focus group it did on behalf of an online stock brokerage targeting a younger demographic.

They wanted to better understand what motivated their customers to invest. They warned us ahead of time that the usual Western stuff, a home, college or retirement did not work. They wanted to know why … and understand what did work.

The group had 15 people. Thirteen had been to one of the city’s elite universities — Hong Kong University or Chinese. They were between the ages of 27 and 32. Anywhere else in the world this should be the class most optimistic about the city.

They were not.

Most still lived with their parents or in a house provided by their parents they shared with siblings. Most knew they needed to get onto the home ownership ladder at some point. But prices and the down payment are so high — few had a real concrete plan.

Their money for investment was mostly for entertainment: clothes, vacations, plastic surgery.

As for future plans, most hoped to emigrate. They just didn’t know how, yet. Otherwise, they said they were trapped.

It was absolutely shocking.

And remember: these were the educated young people in Hong Kong with the best prospects.

Is it any wonder the long burning fuse has exploded? With young people and professionals leading the fight?

And it’s why if Hong Kong’s hapless Chief Executive or her backers in Beijing think this will just go away, they’re deluded.

Sadly, it does mean the demise of a once promising city.