Flashpoint Hong Kong

On today show we're talking about the incremental changes that if taken slowly enough can lull a docile population into submission. Opposition happens slowly at first and then all of a sudden. The current crisis in Hong Kong is a case in point. 

The handover of Hong Kong, occurred at midnight on 1 July 1997, when the United Kingdom ended administration for the colony of Hong Kong and passed control of the territory to China. Hong Kong became a special administrative region and continues to maintain governing and economic systems separate from those of mainland China.

The protests have been large and vocal with anywhere from 200,000 people participating to 2M people depending on who is counting. Police estimates put the largest protest march at about 338,000 people. Let’s be clear, these are large protest marches. 

Protests in more recent days have turned to vandalism and the Chinese government is signalling that they need to restore order and the rule of law. So now the concern is that Hong Kong experiences an escalation of violence involving the police or perhaps the military. 

This could result in an ideological flashpoint between China and the West where the assertion of China’s muscle over Hong Kong creates a values based confrontation between China and the US. 

The global economic impact of a confrontation over Hong Kong could be far greater than the current negotiation over trade practices. Global supply chains could be disrupted and we could experience significant price increases. This is something to pay attention to and ensure that alternate supply sources can service your business in the event of disruption.