Escalating violence during mass demonstrations in Hong Kong is fuelling perceptions the territory has become “a riskier place”, the American Chamber of Commerce warned on Monday, a day after police and protesters fought running battles around the city’s central business district.

After nearly two months of anti-government demonstrations, the territory’s administration should defuse the tensions by conceding to some of the protesters’ key demands, the US business representative group said in an unusually blunt statement.

AmCham said a survey of US businesses in the territory revealed that members thought the government should withdraw an extradition bill that sparked the first mass protests and which, if passed, would allow criminal suspects to be sent to China for trial. While the government has suspended the proposed legislation, pro-democracy groups want the full withdraw the bill.

AmCham also called on the Hong Kong government to conduct an “internationally credible” independent inquiry — another demand of the protesters.

“A clear majority of our membership surveyed over the past week said the government needs to address the underlying causes of the protests and not simply to paper over the cracks of social instability with a short-term law-and-order fix,” said Tara Joseph, AmCham Hong Kong president.

The comments come amid signs of the financial fallout on the city from the ongoing protests, including on its famously expensive property market. Paul Chan, Hong Kong’s finance secretary, has said the protests have damaged Hong Kong’s international image and have hit its normally vibrant retail industry.

Fierce clashes during three days of protests over the weekend sent Hong Kong’s benchmark Hang Seng index down 1.3 per cent in morning trading on Monday, underperforming peers in the region.

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Property developers suffered some of the largest losses, with the Hang Seng property index down 2.3 per cent. 

Ms Joseph said 12 per cent of AmCham’s membership in Hong Kong had responded to the survey which was conducted from July 23-25, before Sunday’s tensions in the centre of the city.

Ordinary people including international travellers, children and the elderly were caught up in the demonstrations on Sunday as police fired tear gas and rubber bullets at protesters along streets where many banks have their offices.

“The survey found that businesses are already reporting serious consequences from the disruption caused by weeks of mass demonstrations, political paralysis and outbreaks of violence and destructive acts in a city that has won an enviable reputation as one of the world’s safest places,” Ms Joseph said.

“These range from an immediate hit to revenue caused by disruption to supply chains and consumption, to longer term doubts over cancelled events and shelved investments.”

In a rare move, China’s State Council’s Hong Kong and Macau Affairs Office is set to hold a press conference on the protests later on Monday.

Chinese state mouthpiece, the China Daily, on Sunday night blamed “external forces” for the protests, just as it said happened with so-called colour revolutions — popular uprisings in which protesters wore distinctive colours — in the Middle East and north Africa.

Via Financial Times