Hong Kong Chief Executive Carrie Lam thinks it might be a good idea to “do more explanation work” before moving ahead with the extremely controversial extradition bill that sparked angry protests this week and threatened to undermine the city’s key economic relationships.
“After repeated internal deliberations over the last two days, I now announce that the government has decided to suspend the legislative amendment exercise, restart our communication with all sectors of society, do more explanation work and listen to different views of society”, she said at a press conference on Saturday.
To be clear, this isn’t likely to satisfy everyone. After all, suspending the bill is something different from withdrawing it, but Lam also said the legislature “will halt its work in relation to the bill until our work in communication, explanation and listening to opinions is completed.”
Suffice to say the public made its “opinions” pretty clear on Wednesday, as did the US.
There was another demonstration planned for Sunday, something Lam likely wasn’t looking forward to. That rally’s organizers weren’t amused with Lam’s 75-minute presser. “We are disappointed and angry after this press conference”, the Civil Human Rights Front’s Jimmy Sham said.
Lam acknowledged the relative merits of avoiding “violence” and what she described as “very serious confrontations”, but she declined to say whether she’d step down. “I have come to the view that I have to do something decisively to address the issue of how could I restore as fast as possible the calm in society, and how could I avoid any more law enforcement officers and ordinary citizens being injured”, she remarked.
Wednesday’s protests rattled Hong Kong shares, while a squeeze in interbank rates catalyzed a sharp rally in HKD. There was some relief in Hibor to close the week, but funding markets are likely to remain tight until quarter-end and in any case, trade war jitters and the Alibaba listing didn’t help the situation.
Read more: Hong Kong Hijinks
The Hang Seng actually managed a gain on the week, thanks largely to Monday’s surge, but the gauge is now on a three-day losing streak, which threatens to derail a nascent bounce on the heels of a brutal May for Hong Kong shares.
To reiterate: This does matter. The extradition bill, had it been pushed through, would have jeopardized Hong Kong’s special status with the rest of the world to the likely detriment of local assets. In a worst case scenario, it could have morphed into a veritable earthquake depending on how things panned out.
More broadly, this was yet another geopolitical flashpoint at a time when powder kegs are proliferating. The high profile protests in the city weren’t the best news for Xi either, who could do without any kind of local turmoil at a delicate juncture for the mainland’s relationship with Washington.
Lam’s critics are not going to be satisfied with this and they likely aren’t buying the notion that any of it (the bill itself and the decision to back off) was her idea.