A barricade burns during a clash between pro-democracy protesters and riot police in Hong Kong on Nov. 12, extending one of the most violent stretches of the city's past half-year of political turmoil.
(DALE DE LA REY/AFP via Getty Images)
Six months of civil unrest in Hong Kong have taken a toll on its economy, which has officially entered its first recession in a decade. The city's third-quarter gross domestic product (GDP) contracted by 2.9 percent in the third quarter of 2019. But while its financial sector -- the city's economic linchpin -- remains robust, the worst is likely yet to come. Deep-rooted grievances are fueling the escalating and increasingly violent attempts by protesters to resist Beijing, but their actions are only hardening the central government's resolve to compensate for the unreliability of its most critical financial link to the world.
With a quick and relatively peaceful de-escalation now out of the question, Hong Kong's businesses and investors will have to adjust to the very likely new normal of operating against the backdrop of persisting protests and political impasses. And this reality, combined with Beijing's steadily strengthening hand and its possible intervention in the...