Hong Kong Riots Cast Cloud over Show

RAPAPORT... Diamond traders have raised concerns ahead of next month's Hong Kong Jewellery & Gem Fair, as mass protests have caused chaos and dented local demand. The show will still take place as planned, organizersInforma Markets confirmed to Rapaport News Friday. However, access to the venues is currently difficult,according to dealers, who are pinning their hopes on unrest in the city receding by thetime the event begins on September 16. "You don't know where to go in Hong Kong right now," said VincentYiu, director of Hong Kong-based Brilliant Trading Company, which plans toexhibit at the fair. "There are protesters literally in all areas. If ithappened today, I don't think the show would be good." The riots are likely tocalm down when protesters return to school and university in September, headded. Anti-government demonstrations began in June, and havedeveloped into large-scale civil disobedience across the city center, includingnear the show venues. Hong Kong International Airport suspended departures for periods of Monday and Tuesday, after campaigners held a sit-in lasting several days. The site, aswell as being the main entry point for visitors, is located next to AsiaWorld-Expo,where the loose-diamond exhibition will run from September 16 to 20.Activistsand police officers have also clashed near the Hong Kong Convention &Exhibition Centre in the Wan Chai area, which will host the jewelry section ofthe show from September 18 to 22. "The impact [of the protests] is very, very negative," saidEphraim Zion, founder of Hong Kong-based high-end jeweler Dehres. "Sentiment isvery, very bad. We don't know what's going to happen. I've already beeninformed by a few clients that they're not coming [to the exhibition]. The showwill happen no matter what, [but] I expect very few people to come." Zion said he wouldn't attend the show if it were today, butexpects the Chinese People's Liberation Army to take action if the protestscontinue for much longer. Meanwhile, sales at his domestic retail clients have"plummeted," as the unrest has forced stores to shut, Zion added. "There issome demand from overseas, but locally, it's dead," he explained. The riots have disrupted the municipality's Mass TransitRailway (MTR), with videos appearing on the internet showing violence insideunderground stations. The US State Department raised its travel warning forHong Kong to level two last week, urging visitors to "exercise increasedcaution" due to civil unrest. "We recognize the challenges we face given the recent publicincidents in Hong Kong, but rest assured we have prepared - and are constantlyupdating and adjusting - a comprehensive contingency plan in partnership and inclose coordination with all industry stakeholders," a spokesperson for Informasaid. The procedures cover "virtually every scenario during thedifferent phases of our show," explained Informa, which has operated the eventsince acquiring UBM, the former owner, last year. The plans were already in place forthe June edition of the fair, a smaller event, which "went off without ahitch," the company added. The September exhibition, a key event for trading goodsahead of the holiday season, comes amid generally weak consumer demand ingreater China. Local jewelry sales have declined due to Beijing's tariffdispute with the US, with the protests further fueling the downturn. The Chineseyuan has depreciated 2.6% against the Hong Kong dollar since January 1,reducing the spending power of tourists visiting from the mainland. "The last three quarters [have] been quite challenging forthe industry, and this is the very reason why exhibitors, buyers andstakeholders across the entire business spectrum are fully engaged to get themost out of the September fair," Informa added. Image: Protesters inside Hong Kong International Airport last week. (Shutterstock)