SVA Update Number 2 - Hong Kong Protests – Threat Assessment – 14 June 2019 1600 hrs

SVA

The announcement of a further protest march from Victoria Park to the government complex in Tamar at 1430 hrs on Sunday 16 June, organised by the Civil Human Rights Front, means that large scale disruption to Hong Kong will likely continue.

The march and attendant activities will further escalate the political confrontation, and may result in more physical clashes.

Protesters are currently buoyed by delays to Legislative Council readings of the extradition bill, and are driven by intense anger at the Hong Kong government’s perceived intransigence, and at the very firm Police handling of demonstrations on Wednesday 12 June.

The absence of the Hong Kong Chief Executive from live media is perceived by many protesters as her “hiding away”, and has emboldened demonstrators in the belief that they can prevail – as unlikely as this is in reality.  The Sunday march will probably attract very large numbers. 

The risk of further violence is significant.

The majority of protesters are peaceable, but certain organised groups have displayed a desire for direct confrontation with the Police.  These groups are small in number, but have had a disproportionate impact on the media presentation of the protests, and, consequently, the Police response.

An unfortunate polarisation has occurred, where demonstrators perceive the Police to be the enemy (rather than the government, in their absence), and many junior Police officers see both the media and protestors as the main protagonists. This development is very unfortunate, and may lead to clashes if both sides do not show restraint and discipline. 

Any further violence will embolden Hong Kong pro-establishment and mainland groups, who are already arguing for tougher action.  The Police might also inadvertently heighten tensions, by carrying out arrests associated with last Wednesday’s riot-related offences; these carry long jail terms, of up to ten years for rioting. 

The Police have a mandate to make such arrests, but the removal of leaders in such a decentralised movement may do little to deter protestors; rather, any sense that a purge is under way, or could follow, would only fuel indignation.   

For now, the government response has lost momentum, and seems to have stalled. Some elements in the local Hong Kong-based coalition behind Chief Executive Carrie Lam Cheng Yuet-ngor are now wavering, conscious of the government’s history of compromise, as in 2003 over Article 23 legislation on national security, and in 2012 over the national education laws. 

That said, Lam seems determined to pass the law, as does the Chinese Central government (even if the latter has denied directing the local government to do so).  The longer she delays the worse the government’s predicament becomes.

Looking forward

The contest thus seems liable to last for some time.  Short of a complete government climbdown (which currently appears unlikely), protests will probably continue into next week, and perhaps morph into the annual march on 1 July, the date of Hong Kong’s reversion to Chinese rule. 

Any protests on Sunday will likely be significant in scale, and largely peaceful.  However, some attendees do seem bent on violence, which could provoke another tough Police response.  In short, this stand-off no longer resembles the 2014 Occupy Central movement, but is taking on a much nastier tone.

If Police move forcibly against the remaining protestors, then considerable disruption and the widespread use of force, including the deployment of pepper spray, CS smoke, projectiles and other internal security equipment, must be anticipated, as was evident on Wednesday. 

Protests could, in the longer term, move to other areas, such as Causeway Bay, or across the harbour to Mong Kok, as Police actions successfully split up key activists. 

The emergence of such splinter groups could lead to pockets of disruption, or even violence.  Protests spilling into certain districts could also draw in triad elements, as during the 2016 Mong Kok riot, heightening the risk of violence and criminality. 

A prolonged confrontation will also, in time, precipitate a response from pro-mainland groups.  Counter-marches would stoke tensions, and confrontation between different groups could readily end in violence. 

Corporate Contingency Planning and Mitigating Corporate Risk

Further protests will affect the Hong Kong business environment. 

At a minimum, the protests promise disruption to Admiralty, Central, Wan Chai and Causeway Bay, and pose risks to businesses and staff in those areas in the working week. 

The retreat of protesters into the Pacific Place mall on Wednesday also highlighted how certain sectors, such as retail and hospitality, could potentially suffer.  Major malls should reassess their vulnerability. 

The cancellation of major business events might also slow financial activity, albeit to a limited degree.

US Political considerations

A larger question relates to the US, which might respond, in the worst-case scenario, by amending its Hong Kong Trade Policy Act to tighten export controls, or by introducing legislation that allows for sanctions.  Preliminary moves for such changes are under way in Washington.

Barring a serious escalation, though, the likelihood of the US making such changes seems low at present, although this situation requires very careful monitoring. 

What to do to Protect Corporate Interests

As before, SVA recommends that all companies likely to be affected evaluate their individual risk profile, and monitor developments closely.

At a bare minimum, planners should examine the following:

Businesses should also assess the political ramifications of the contest in Hong Kong, particularly if involved in sectors that could become subject to export controls or other sanctions measures, such as high technology or finance. 

Of course, different businesses have widely varying requirements, and thus all plans need to be practically tailored to meet their specific needs.

SVA stands ready to assist companies as may be necessary and can deploy at short notice.