Clipping Cathay’s Wings: Beijing Coming Down Hard on Companies Supporting Hongkongers

Under pressure from Beijing, Hong Kong airline Cathay Pacific laid off two ground employees and suspended a pilot for being involved with the protest movement. (Image: Screenshot / YouTube)
Under pressure from Beijing, Hong Kong airline Cathay Pacific laid off two ground employees and suspended a pilot for being involved with the protest movement. (Image: Screenshot / YouTube)

After threatening military intervention, Beijing has added one more pressure tactic to its arsenal in a bid to stop Hongkongers from protesting against Chinese communist control in the city — loss of jobs. Reports suggest that companies are being made to pick a side in the ongoing conflict, with businesses warned by China that they would suffer if they supported the protests.

The Chinese pressure

One of the first victims of Chinese pressure is the Hong Kong airline Cathay Pacific. On August 10, the airline confirmed that it had laid off two ground employees for engaging in “misconduct”

related to the protest movement. One pilot was suspended on charges of rioting. The Civil Aviation Administration of China (CAAC) recently announced that airline employees found to support Hong Kong protests would be banned from flights to the mainland.

“Cathay Pacific Group’s operations in mainland China are key to our business. In addition to flying in and out of mainland China, a large number of our routes both to Europe and to the USA also fly through mainland China airspace… We are therefore legally required to follow CAAC regulations and, as is the case with any notices issued by any regulatory authority having jurisdiction over us, we must and will comply,” the airline said in a statement (Channel News Asia).

Interestingly, Cathay Chairman John Slosar had previously defended the employees’ right to participate in the protest, arguing that the company had no right to tell workers what to think. As such, the company’s decision to punish three employees for taking part in the protest indicates that they must have come under huge pressure from Beijing. To make matters worse, the CEO of Cathay Pacific, Rupert Hogg, shortly resigned after the incident. Paul Loo, one of Hogg’s deputies, also stepped down.

(Image: Screenshot / YouTube)

Cathay Chairman John Slosar had previously defended the employees’ right to participate in the protest, arguing that the company had no right to tell workers what to think. (Image: Screenshot / YouTube)

Accounting firms working in Hong Kong also seem to have succumbed to the demands of the Chinese government. The big four accounting companies — Ernst & Young, PwC, KPMG, and Deloitte — have issued statements confirming that they will not stand for any action that would challenge “national security.’ Netizens from China warned the companies that they might become the next Cathay Pacific if they support the ongoing protests in Hong Kong.

“It’s an illustration of the influence that can be brought to bear by the mainland government on Hong Kong businesses… I think it would have all the C.E.O.s of the major companies looking over their shoulder and wondering whether they will be next to be held accountable for the actions of their employees,” David Webb, the publisher of a financial and corporate governance website in Hong Kong, said to The New York Times.

Hong Kong economic effect

The HK protests are having a huge negative impact on the city’s economy, especially its tourism sector. A recent survey showed that earnings of tourism industry workers fell by about 74 percent in the months of June and July compared to the same period last year.

(Image via pixabay / CC0 1.0)

The HK protests are having a huge negative impact on the city’s economy, especially its tourism sector. (Image: via pixabay / CC0 1.0)

“The impact is even more severe than the 2003 SARS outbreak, because at least the whole of society was united in combating the public health crisis back then. With the recent protests, society is riven with divisions and we really don’t see an end in sight,” Paul Lau Chun-yuen, president of the Hong Kong Tour Escorts General Union, said to South China Morning Post.

The government of Hong Kong announced that it is downgrading GDP growth forecast for the year after taking into account the business impact of the protests. The new prediction is for GDP to grow between 0 and 1 percent this year, down from the previous forecast of 2 to 3 percent growth.

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