Financial Secretary John Tsang Chun-wah introduced a new fiscal budget recently, with aims of dispelling fears and spurring growth. The South China Morning Post reported that the budget created "sweetners" for the lower and middle classes. The idea is to ease tensions in the wake of Occupy Central.
Hong Kong's economy was largely unaffected by the social movement, despite opponents of the movement claiming otherwise. The cause for Hong Kong's 2014 decelerated economic growth, which fell below the 10 year average of 4.5%, can be attributed to a strong US dollar, decline in oil prices, and overall global uncertainty.
While Occupy did not cause the deceleration in China, it did expose deep fractures within the region. Unlike our Occupy movement which called for more equitable distributions of wealth, Occupy Central demanded universal suffrage.
The Occupy Central With Love and Peace movement took place in "Central," Hong Kong's Wall Street equivalent. It is estimated that more than 15% of the population took part in the protest during the three-month demonstration. In a single day, it was estimated that over 100,000 activists took to the streets. The unrest that drives that sort of protest does not just evaporate overnight. But the Financial Secretary seems to think "sweetners" will satisfy the people's desire for political equality.
The "sweetners" directed at lower and middle class consumerism represents the only legislative change to come out of Occupy. The aim is to give the people more spending capital. I'm skeptical that a movement this strong could be simply swayed with a few more days spent at the mall. But I could be wrong. Perhaps, 'consumerist suffrage' will pacify spirits.
Every individual has the right to choose their political representation. The world should support the Chinese pursuit of self-actualization. If this means divestment, so be it. Either way, the exploitative practices used at Chinese factories have gone on far too long. Their situation remains relatively unchanged while the country surrounding them has grown prosperous.
In the long-term, growth in China will continue. But investors should not overlook the impact unrest of a billion Chinese citizens will have on the market.
Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.