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Saturday, Sep 19, 2020

What happens to Hong Kong’s economy when businesses are split by protests into ‘blue’ vs ‘yellow’?

Anti-government movement keeps up attacks on ‘blue’ businesses to grow ‘yellow economy’. Experts say attempts to split Hong Kong economy along political lines are unworkable

In a vibrant arts workshop in Hung Hom, dozens of young people, some masked, are hunched over tables hard at work.
On one wall, a large mural shows a crowd of masked and helmeted protesters dressed in black.

The young men and women in their teens and 20s are in good spirits, chatting as they turn out handmade cookies, mini fa pai – floral decorative plaques – key chains, drawings and coasters.

Many of the works carry slogans like “Five demands, not one less”, “Free Hong Kong”, “Revolution of our times” or images related to the anti-government protests which have rocked the city for more than seven months.

Everyone present is paid HK$60 an hour to attend the vocational classes organised by pro-democracy restaurant owner Cheung Chun-kit, 40, as part of what he calls the “economic circle of conscience”.

He came up with the idea of providing vocational training to help young people affected by the ongoing social unrest to equip themselves with skills and become financially independent.

Cheung, who runs the Lung Mun Cafe chain of restaurants, said: “Because of this unrest, many young people have become jobless, penniless, ‘school-less’ or even homeless, as some have even been evicted by their families.

“I want to make them feel that they can still find hope in their lives.”

Using more than HK$1 million of his own money, he launched more than 20 free classes in December alone, with the help of volunteer instructors for hairdressing, beautician training, leather craft, as well as making cookies and mini fa pai.

Several hundred people have signed up as “apprentices”, attending courses that run for a few days a week or over a few sessions a month. Those learning hairdressing do a five-day course offering two days of practical training in a salon.

Cheung said so far, more than 10 had gone on to land jobs as hairdressers, while 40 found work baking cookies, and 30, making mini fa pai.


Growing a ‘yellow economic force’

Cheung’s “conscience” enterprise takes off from an ongoing campaign by anti-government protesters – so-called “yellow ribbons” – to support businesses that back them, while shunning those that are considered pro-government, pro-Beijing or pro-police.

For several months now, they have branded some shops and restaurants “yellow” for supporting the movement, with mobile applications sprouting to provide lists of “yellow” business to patronise and “blue” establishments to boycott for supporting the authorities.

Well-known “yellow” eateries include Cheung’s restaurant chain, as well as the JarGor 1996 snack chain, which often sports long queues of customers, especially young people.

On the other hand, restaurants branded “blue”, such as those owned by the Maxim’s group, Best Mart 360 and Japanese fast food chain Yoshinoya, have had their premises vandalised, torched or covered in graffiti.

The pro-Beijing Fulum Group, which owns 78 restaurants, posted a net loss of HK$63.8 million for the half year until the end of September last year, compared with its net profit of HK$12.7 million over the same period the previous year. The “blue” Hunghom Cafe chain was hit so hard, it was reported last November to be seeking new tenants to take over its six premises.

The anti-government movement hopes to grow the “yellow economic force”, uniting businesses that support it.

“The yellow economic concept is heading in the right direction by boycotting the blue shops. This will lead to yellow shops making more money and opening more shops,” Cheung says.

However, he insists that his “economic circle of conscience” is aimed at creating a better future for younger Hongkongers in the wake of the unrest.

By the end of last year, about 6,500 people have been arrested since protests began last June, some as young as 12. Those who are eventually dealt with, especially for rioting, face jail terms and an uncertain future. Even if they are acquitted, they may still lose their jobs and places in school, or find it hard to get hired.

Cheung hopes to set up a foundation to make his “economic circle of conscience” sustainable, with the primary goal of ensuring jobs for those who need them.

e has been looking for business partners to offer free training, and also hopes to attract university professors and professionals such as lawyers and accountants to run classes for young people.

“This has nothing to do with changing the economic landscape of Hong Kong,” he said. “I am only concerned about the long-term future of these youngsters. We should think about the next 10 or 20 years. Some may be locked up in prison for a long time and how they or their families can survive will be an issue.”

Chan Sing, 44, the boss of Chan Sing Workshop, a mini fa pai production firm, is among a handful of “yellow” businesses that have joined Cheung in his efforts.

After his 19-year-old son was arrested last July over the protests, Chan declared on Facebook that he would refuse orders from police.

Business dropped, and was hit further by the economic downturn. Chan said there was a point when it looked like he might have to shut down.

But over the past month, he has received a flood of orders from “yellow” clients after he joined Cheung and began holding free classes to teach youngsters how to make mini fa pai.


‘Stupid’ to divide economy by politics

Although Cheung and Chan say they are concerned mainly with helping young people, the “conscience” effort is seen to fit in with the “yellow economic concept” dividing businesses into yellow or blue groups.

This has sparked an ongoing debate over what it means for Hong Kong businesses to be split this way and the effect on society.
Simon Lee Siu-po, co-director of the international business and Chinese enterprise programme at Chinese University, says much depends on whether businesses in the “yellow economic circle” can provide quality goods and services.

“Using one’s own political stance to attract business may only work for a short term,” he said. “In the long term, if firms fail to keep their customers happy with their goods or service, they may go. A successful business can never only depend on a political slogan.”

For the “yellow economic circle” to succeed, he said, “yellow” shops must unite in making long-term strategies, avoid vicious competition with one another and form alliances.

“If this is just some loosely-organised circle of individual firms without a common goal, it won’t have any impact on the city’s economy,” he said.

Lee said it was not impossible for a yellow economic force to break the market dominance of pro-Beijing firms in Hong Kong.

“If yellow firms are united and dedicated to cultivating like-minded younger people through employment, vocational training and partnerships, they will have more bargaining power to counteract the blue camp’s economic dominance,” he said.

Others have poured cold water on the idea of a “yellow economic circle” gaining influence.

Billy Mak Sui-choi, associate professor of finance and decision sciences at Baptist University, dismissed it as “unworkable” and “stupid”.

“To maximise profits, a business should attract a broader base of customers. To target a particular group of customers based on political considerations will only limit your customer base and eventually restrict business growth,” he said.

As for the yellow group’s strong anti-Beijing stance, he asked: “How can a firm entirely cut ties from the mainland and refrain from using any mainland materials?”

That was a point also made by former chief executive Leung Chun-ying, who underlined the close links between Hong Kong businesses and the mainland in a social media post.

He wondered how the so-called “yellow economy” could completely sever ties with the mainland especially when most local firms relied on the import of raw materials from the mainland.

Noting that even water has to be imported from the Dongjiang in Guangdong, he added sarcastically: “French mineral water can, of course, be used for taking a bath or washing the toilet. But it’s a bit expensive.”

Secretary for Commerce and Economic Development Edward Yau Tang-wah argued that no economy can draw a line to decide who to include or exclude.

He called for reconciliation of shoppers and diners with different political views, saying Hong Kong’s competitiveness came from its free and open economy.

“Hong Kong must move on, so we have a campaign called ‘Hong Kong is On’,” he told the Post in December.

“I am not interested in the colour of economic circles you are in, there is a major division already. Should a family go dining in two restaurants? How can we reconcile if the situation goes on?”

Economist Andy Kwan Cheuk-chiu, director of ACE Centre for Business and Economic Research, said there must be some firms pretending to be “yellow” to cash in on protest trends.

However, he said “yellow” customers were all very savvy and would be able to tell the fake ones from those who really supported the movement.

“They have some criteria for these yellow firms, such as a track record of taking part in citywide strikes, giving freebies or donations to protesters, or having a ‘Lennon Wall’,” he said.

Kwan said only certain sectors such as dining, retail, advertising and marketing, as well as IT would be able to sustain “yellow” practices as these had individual firms.

“But for Hong Kong’s four key industries – finance, tourism, trading and logistics – it’s very hard for the yellow economic circle to even make an entry. The sectors are all dominated by corporate clients and most of the firms have ties with the mainland.
“It’s impossible for such trends to have an impact on the overall economy,” he said, adding it was more of an ideology than a changing economic landscape.


Paying the price for being ‘blue’

On the ground, even small businesses have had a hard time after being branded “blue”. Not only have “yellow ribbons” and their supporters boycotted these establishments, they have also made numerous complaints against the shops to different government departments, such as the fire services, health authorities, and the lands and highways departments.

The Ngan Loong Cafe in Lei Yue Mun and Friendly Tasty restaurant in Tai Po, saw their fortunes change overnight after the owners expressed support for police.

Kate Lee Hoi-wu, 51, a single mother who runs Ngan Loong Cafe, became the target of online abuse and repeated complaints to the authorities after she put up signs in her restaurant backing police late last June.

“For the first three weeks, I had very few customers. There was a day when I earned only HK$80,” she recalled, saying she chalked up debts of “several tens of thousands of dollars”.

In a dramatic turn, business began picking up in late July, after some officers, including new police commissioner Chris Tang Ping-keung, came to her shop and thanked her for her support.

Following that, some “blue ribbons” and mainland tourists started coming to the restaurant, and some even volunteered to help her run the place.

“Now my restaurant is full of customers. I can tell you business has never been so good,” she said, adding that she was still trying to repay her debts.

The experience has left her firmly against the notion of colour-coding the economy. “This will only sow further discord in society,” she said.

Widow and single mother-of-two Wong Lee-lee, 38, who runs the Friendly Tasty restaurant serving rice noodle rolls and traditional desserts, paid the price for saying on Facebook last June that she supported police.

The online abuse came flooding in, her shop was branded “blue” and people called for a boycott. Her business suffered and is still struggling, according to her. She said that she has had to dip into her savings to make ends meet.

While Wong insisted she did not regret stating her view, she was against dividing Hong Kong businesses into yellow and blue economic circles.

“I don’t care about this kind of labelling,” she said. “I welcome all sorts of customers, yellow or blue. I woo customers with my food and service. That’s all.”

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