Hong Kong protests deepen retail gloom as China visitors stay away

Sun Sep 28, 2014 5:39pm EDT
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By Donny Kwok

HONG KONG (Reuters) - Increasing civil unrest in Hong Kong is scaring off Chinese tourists, heaping further pressure on retailers which are already grappling with a protracted slowdown in sales.

Central Hong Kong descended into chaos on Sunday as pro-democracy protesters converged on barricades as hundreds of police cordoned off streets and walkways and tensions flared amid the arrest of several lawmakers. Police used tear gas to disperse demonstrators.

With mainland Chinese travelers likely to avoid Hong Kong over the long National Day holidays this week due to planned protests in the city, the downtrend in retail sales in the former British colony is set to extend beyond its six-month slide.

Already hurt by Beijing's anti-corruption campaign, which has led Chinese visitors to tighten lavish spending in the city renowned as a shoppers' paradise, Hong Kong businesses are also facing a slide in the number of tour groups.

Added to which, those who traipse across the border each day are now more interested in basic household products and infant milk formula than luxury handbags and high-end fashion, data shows.

Travel agents said the number of Chinese tours has dropped by up to 30 percent, boding ill for the busy Golden Week holiday that starts on Oct. 1, usually a busy period that retailers rely on for a boost to their sales.

Hong Kong activists are expected to lock down the heart of the financial center on Wednesday, part of a civil disobedience movement that some fear will hurt the city's competitiveness and business environment. At the heart of their demands is the right for Hong Kong people to choose the city's next leader, rather than a leader pre-selected by Beijing.

Demonstrators are demanding democracy in a series of protests that will culminate in an "Occupy Central" blockade of the financial district on Oct. 1, the start of China's long holiday.   Continued...

A mock tank, covered with photocopies of the "One country, two systems" white paper released earlier by Beijing on Hong Kong's control, is displayed by local artists to symbolize its threat to the city's autonomy at a shopping district in Hong Kong in this June 19, 2014 file photo.REUTERS/Bobby Yip/Files