After a long period of strife and demonstrations in Hong Kong, this Wednesday (4/9), the Chief Executive of Hong Kong, Carrie Lam finally announce that the government will officially withdraw the controversial extradition bill, one of the focal causes for the ongoing protests. Financially, the decision was welcomed warmly by stock indices in Hong Kong and around Asia. The Asian stocks were traded higher after news of the withdrawal. According to trade data, Hang Seng went up 3,9%, Shanghai Index build up to 0,93%, Kospi Index increases to 1,16%, Strait Times index grew up to 1,29% and the Nikkei Index rises 0,12%. The bill is the centre of a debate surrounding Hong Kong’s autonomy and the influence mainland China has for the financial hub. How and why is the bill so important?
RUU extradition is the controversial draft of a law for Hongkong residents because of the possibility of the perpetrator being extradited to the continent of China. Hence, the perpetrators that escaped to Hongkong from China (citizens of China) will be judged back to China, the fact that this thing is right. But, this RUU extradition will be used by the China Government to targeting their political enemy in Hong Kong. This RUU also concerned to be more scraping the principle of “one country, two systems” with the intervention of China in the Hong Kong court. Carrie Lam, the Chief Executive of Hong Kong, is the one that in the end vanished the RUU extradition. After the deletion of RUU, Hang Seng Index (the index of 40 biggest corporation share in Hong Kong) are rising. This was one of the main demand by the protesters. Since the controversion of the RUU extradition, Hong Kong residents are a quarrel with police for the last 16 weeks starting from June 2019 until now.
Recently, Chinese stocks have steadily ticked upward. The country’s PMI (Purchasing Managers Index) which is an economic indicator that reflects the confidence of managers in a sector released a report in August, showing the highest number in the last 3 months for services sector in the country. Caixin recorded 52.1 points, higher than in July which recorded 51.6 points. The rising number was driven by an increase in number of orders and rapid employment growth to the highest level since June 2018. The expansion of employment in China is good news for a country while China is struggling to fight against slowing business activity in the manufacturing sector which has dragged China's economic growth to its lowest level in 30 years. The country’s politicians have reportedly talked with pro-China legislators in Hong Kong to talk about the still-continuing protests, as the government has only met one of the five demands from the demonstrators.
Sources:
CNBC
The Guardian
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