2019-2023 was HK’s Worst Period Since WW2

How did people react & why? What was the result?

What does this teach us about leading change?

First person observations by Peter Nixon, January 2023

On just about every measure the last four years have been the worst years for Hong Kong since the four years it spent under Japanese occupation between 1941-1945. I met some of the Canadians that bravely defended Hong Kong in December 1941. For those lucky to survive the war, these were the toughest years of their lives. In a similar way, I think the residents of Hong Kong will look back on the last four years as the toughest period of their lives.

Waves of Bad Luck

HK’s four years ending 2023 were probably the worst faced by any developed economy during that same period. Hong Kong’s problems began with the political unrest of 2019. Things worsened when the police responded by arresting thousands of democracy protesters. At about the same time Covid arrived (HK is just 500 KM from Wuhan) and the government responded with the world’s longest and least effective covid precautions in the world. In the midst of the covid lockdown, Beijing imposed its National Security Law on HK permitting detention without trial, arbitrary arrest, and unquestionable rule by the Communist Party of China. Hong Kong’s covid restrictions even outlasted those of China which removed theirs overnight in response to widespread desperation and economic collapse in China.

How bad did it get

During this period Hong Kong suffered its worst recession, its worst drop in the stock market, and its worst drop in real estate values since WW2. The territory also had the highest covid death rate per million in 2022, the highest talent exodus since Tiananmen Square, and the most business closures, job relocations, and highest unemployment since WW2.

For those of us who lived through this turbulent period it was all we could do to maintain a sense of stability while the world rocked around us. For those of us running businesses directly affected by covid lockdowns (e.g., airlines, hotels, restaurants, bars, gyms, gig workers, etc.) it was the worst of times. For healthcare workers it was a matter of life and death every day. And for educators trying to run schools and continue teaching in response to the health concerns, mass exodus of students and teachers, and continuously changing illogical rules imposed by the Education Department, it was by far the worst stage of their careers. And through all this Hong Kongers also worried about catching covid, being forced into government quarantine centres, and responding to compulsory testing mandates in response to close contacts of close contacts of people testing positive.

How it affected me

My work in Hong Kong was interrupted by the protests in 2019. In corporate groups featuring employees from both HK and China we needed to ensure the protest topic never arose since it would lead to conflict between co-workers. This was challenging given my specialisation in the leadership, dialogue, and negotiation of change. I even had participants tear gassed on the way to my talk on conflict. Towards the end of 2019 I was invited to be one of the facilitators at a large NGO sponsored event trying to solve the conflict in HK. Nothing came of this initiative and soon thereafter HK turned its attention to the arrival of covid.

By Christmas 2019 it became clear my local and international facilitation, training and speaking had come to an end. No one gathered in groups again for years, especially in HK where fear of covid, the mask mandate, and restricted group sizes continued into 2023.

Since covid had brought an end to my work, I spent 2020-2023 based in Discovery Bay walking between my home, office, beach/plaza, and mountain. For thirty years prior to this I was constantly flying around the world so I welcomed the chance to stay put in one place for a change. I needed the Lonely Planet Guide for staying home. I dedicated myself to moving my work online and studying the situation so I could help my family, friends, and pro bono clients survive this difficult period.

Making Sense of Peoples’ Responses

Reflecting on the last four years I found people in HK responded in 8 different ways. I share the descriptions of these responses below along with my thoughts on why people responded as they did, what resulted from their responses, and what this terrible period teaches us about the leadership, dialogue, and negotiation of change. As we enter an even more complicated future post covid, I think these observations will serve useful.

Perceived Strength and Risk Tolerance

After identifying six main responses I compared them on two axis, perceived strength and response to risk. This enabled me to identify two more response types. It seemed clear to me that people who perceived themselves as strong or invincible reacted to the situation quite differently than those who perceived themselves as weak or vulnerable. The difference in perceived strength seemed to be a mixture of things like amount of savings, self-confidence, positive outlook etc. People with little savings and that perhaps already felt weakened by their personal situations and outlook were at the opposite end of this axis.

The other axis which seemed to differentiate response in crisis seemed to be their tolerance of risk. At one extreme were risk takers, often entrepreneurs and young adults that had risked before and won and were willing to do it again. At the other extreme were risk avoidant people who were afraid of the menacing laws being enforced by police and also afraid of catching covid. For these people their fear seemed to exceed that warranted by science and you would see them in public wearing gloves, double masks, plastic visors, and using tissue to touch all common surfaces. They would wait for others to open their doors and push their buttons in the lift.

Based on my differentiation of perceived strength and risk tolerance I have identified eight types of crisis response in the people and organisations I witnessed first-hand during the period 2019-2023. I name and describe each response type below. The comparative location of each type on the two axis appears after the descriptions.

1. Swim against the tide “The Contrarian”

People and organisations that swim against the tide are not common and when you spot one, they immediately attract attention. During the crisis these people stood out. Some were anti-vaccers and argued against the emerging scientific results. They were prepared to go without certain privileges (e.g., restaurant access etc.) to maintain their anti-vaccination status. The most famous of these was Novak Djokovic, possibly the world’s #1 tennis player at the time, whose anti-vaccination status caused him to be extradited from Australia and prevented from potentially winning the Australian Open in 2022. Another group of contrarians in HK were those people prepared to protest China’s crackdown on HK even after their safety became in doubt.

I witnessed two organisations invest in when their industries were fast declining. One was Greater Bay Airways in HK, a start-up that began investing at the same time Cathay Pacific was terminating 90% of its routes and parking the majority of its planes in Alice Springs to wait out the crisis. The other contratian organisation I witnesses was Marriott which kept opening hotels for its investors during the near collapse of the hotel industry. In both cases these contrarians believed the travel and hospitality industries would bounce back after the crisis and they wanted to be ahead of their competitors when that time came.

Another contrarian was friend’s family which opened a restaurant in Wanchai at the height of covid and exactly the same time hundreds of restaurants were closing due to the impossible restrictions placed on eat-in dining by the HK Government. They were perhaps taking advantage of deep rent concessions being offered by landlords but things didn’t work for them and I will explain later.

Another example of contrarian was the buyer of my home in HK. My buyer saw a choice location for an attractive price whereas I forecast real estate prices were going to continue to drop considerably. My buyer felt protected from further price depreciation by the fact she planned to keep the property long term and hopefully double her money during that time.

The anti-Beijing protesters that took to the streets in 2019 were a small percentage of the HK population and most of these either emigrated after imposition of the draconian National Security Law (cut and run) or censored their views and went quiet (follow the crowd).

People take different views of the future in a crisis largely because of their perceived strength and risk tolerance. In all these cases the contrarians had money to burn and were willing to take a risk in hope of outstanding returns. This response can also pay handsome returns in the stock market when you are right but things don’t always work out as you hope as the backers of cyrpto exchange FTX found out when they lost US$ billions.

By 2023 most anti-vaccers had survived fine but some sadly died from covid. All had to deal with short-term inconvenience and persecution. Novak returned to Australia in early 2023 and won his first tournament there since being extradited. GBA got off the ground but still has only a very small fraction of the size of CX. Marriott has made an impressive run of hotel openings around the world during the crisis and appropriately spread their Asia Pacific leadership to bypass Hong Kong’s uncompetitive travel restrictions during the crisis.

My friend’s family had to closed their restaurant in early 2023 after realising a lot of their customers fled HK (cut and run). The anti-Beijing protesters disappeared from public view either through arrest, emigration, or self-censorship (although their issues remain unresolved).

In summary, some contrarians won, some lost, and some eventually changed to their response (e.g., Cut and Run) once they realised their original response wasn’t working in their favour or according to budget.

In hindsight contrarians realised swimming against the tide was harder than forecast and even if initially a winning strategy, over time it lost effectiveness as conditions changed e.g., CX came back with more planes, restaurant customers departed HK.

2. Join the Crowd “The Joiner”

People who chose to join the crowd did so consciously and felt strong doing so but unlike contrarians they were less interested in standing out from the crowd. In this group I saw people joining the democracy protests anonymously. While millions marched only thousands were prepared to stand out and go to jail. Early in the pandemic this group of people still needed to be convinced when others began voluntarily donning masks but in the end everyone in HK put on a mask in public. Another place we spotted these people was in response to adopting the Government tracking app on mobile phones. The Leave Home Safe app was adopted slowly, and only once its use was mandatory did most people start using it. Opposition to the app remained until it was finally scrapped in early 2023.

This group of people do not join the crowd blindly. They are independent thinkers and want evidence before deciding how to respond. This group recognises the wisdom of the crowd and without any good reason to be contrarian seem to have eventually fallen into line with the majority because they thought it was the right thing to do. People who held off getting their first vaccine are also in this group.

Because these people eventually join the crowd, they seldom stand out. They remind change leaders that changing behaviour takes time for a lot of people to eventually follow what scientists had been saying all along. This group can perhaps also be seen in the environmental movement where a significant percentage of the population now separate refuse at source and do what they can to reduce pollution and slow climate change but this movement has been around for decades. Climate change can’t wait for slow adopters to switch to renewable energy sources.

3. Follow the Powerful “The Follower”

Whereas people that join the crowd do so consciously and perhaps take longer to fall into line, those that follow the powerful do so without question and without hesitation. This group is more risk averse and perceive themselves as weaker than Contrarians and those that join the crowd.

The people I think of in this group were the first to wear masks and they criticised me and others that remained maskless until science proved the airborne transmission of covid. The followers went further and double masked, wore visors, plastic gloves and used tissues when touching common surfaces like door handles and elevator buttons.

This group also spoke out against the democracy protesters, unwilling to consider they had any valid complaints (e.g., cost of housing, job opportunities). This group also find it hard to say anything negative about the patriotic leadership of China even when there are obvious problems with things in HK (e.g., limits to justice, freedom of expression, and freedom of the press). This group feel it appropriate to say positive things about the powerful they follow even when what they say sounds a bit off (e.g., China was bold to remove its covid restrictions overnight after the covid zero strategy made it safe to do so).

People who follow the powerful seem to me to be driven by fear of the consequences of not doing so (very risk averse) and don’t see any better alternative so they find it easier to follow than not.

Through the crisis this group came to realise the powerful were not always right, honest, or transparent with their decision making. They came to realise that as conditions change so too should the response. They realised it is often better to think for yourself. A smaller group of this type also came to realise that living in fear doesn’t lead to the happiest outcomes.

This group reminds change leaders that some will follow the powerful even though they may be leading them in a selfish direction. The problems in the USA with the Jan 6th attack on the US Capital is a sad example of this group of followers. Change leaders have recognised now the importance of mis/dis information and helping people assess for themselves the validity of the information they are being fed either by the media and friends.

4. Hibernate until Spring “The Hibernator”

I am one of the people that in a sense hibernated during the crisis preparing myself for the arrival of Spring after the crisis. I did this by staying in my secluded community of Discovery Bay, Hong Kong and studying, practicing, and moving my consulting and training business online so I could offer onsite, online, and hybrid services globally after the crisis ended.

Other groups I saw follow this response included my clients, especially HR departments, Chambers of Commerce, and Management Institutes which simply cut external events and focused instead on internal activities. Most airlines, notably CX, did this too, choosing to lay off pilots and cabin crew and parking their planes in Alice Springs to reduce losses and wait until air travel resumed post covid.

This approach raised questions about core mission those that effectively abandoned their members or customers and focused instead on internal issues. Those that chose this response had sufficient savings to wait out the crisis and prepare for Spring. They had a clear idea of how they would use their time (e.g., upgrade skills, education, fitness, have babies) and they all saw light at the end of the tunnel knowing eventually things would return to a new normal and when that time came, they would be better off.

In hindsight these people realised the winter lasted longer than expected (HK was the last major economy in the developed world to reopen). They also realised that life moves on during a crisis and the new normal they prepared for in the winter might not have been what awaited them when Spring finally arrived (e.g., who forecast Russia invading Ukraine and all its negative impacts).

This group reminds change leaders the “lie down” movement might contain people who are actively preparing for the future. It also reminds us of the importance of helping people keep abreast of changing conditions affecting their original assumptions. For example, the actions of China and Russia in the last four years has caused corporate and state players around the world to speed up supply chain diversification and renewable energy development, two trends we did not predict at the start of the crisis.

5. Maintain Status Quo “The Maintainer”

I first considered calling this group Do Nothing but it takes considerable effort to maintain the status quo when everything is changing around you. I find people in this group feel slightly less strong and slightly more risk averse than the average. Since they don’t think they can change things it is easier to focus on keeping things as they are. I think of civil servants, HK’s largest employment group, which chose very professionally to keep calm and carry on despite the major upheavals in government caused by the demoncracy protests, pandemic restrictions, National Security Law, and mass exodus of co-workers during the crisis.

I think part of this group’s response is also based on the fact life was ok for them before the crisis began and if they could maintain most of their routine and traditions they would make it through the crisis ok.

After four years of significant change around them it is clear some of these people are now further behind. This is especially true in disciplines that changed a lot since 2019 such as online learning, blockchain, supply chains, and geo-politics. If you compare HK and Singapore before and after covid, I think you will agree that Singapore exited the crisis with more jobs, more investment, more stability and a clearer direction than HK.

Change leaders should recognise this group of people is often a considerable size and if not nudged along can become a significant drag on your change efforts. One clear example of how HK has fallen behind is perhaps its over emphasis on maintaining the status quo, e.g., the use of cash in HK compared to Singapore and Shenzhen. Behaviour change is hard and some need a bigger nudge than others.

6. Grind it out to the end “The Grinder”

Perhaps because I am an entrepreneur or close to many people who have been grinding it out since the start of the crisis, this group has pre-occupied more of my time during the crisis than the others groups. These people are risk takers and perceive themselves as mostly invincible. Health workers that held up our hospitals and served covid sufferers through the crisis are the first in this group that come to mind. As their grind continued however lots of healthcare workers quit and with few joining the work for those remaining became harder and harder through the crisis.

The second group that had an incredibly difficult time through this crisis, especially those in HK, are educators. Teachers, principals, and school staff put themselves in harms way daily for years, they learned to teach online, they dealt with inconsistent government policies, upset parents, scared children and, like healthcare workers, watched as more and more of their co-workers quit the profession making the workload even more difficult for those choosing to grind it out to the end.

Some teachers are also young parents, a subgroup that has had a particularly hard time due to home-schooling, difficulty in their own careers (loss of income) and many also had to deal with sick grandparents. This group had no choice but to continue to grind it out to the end.

Another group in this category are the owner managers of small service businesses that chose to grind it out to the end believing they could make it. They were also inherently motivated by the fact they were helping friends and customers get through the crisis by continuing to provide their own services.

People in this group are tough, resilient, positive thinkers. They believed they could outlast the crisis, had no easy income alternative, and wanted to help others by keeping calm and carrying on. The impact of the crisis hasn’t been easy for anyone in this group. In my assessment it wasn’t the depth of the crisis that caused the most damage it was the duration. People can be tough for a few years but given the crisis period in HK started in 2019, by the time 2022 arrived the combination of covid, economic, and political problems, together with the duration of the crisis caused many in this group to be ground down themselves beyond anything they had previously experienced. As a result, some survived, some wore out, some were forced to follow other options in 2022 (cut and run, surrender to fate), and all had to deal with the negative impact the stress had on their mental health, relationships, and careers. Very few small businesses survived through to 2023.

They say pressure makes diamonds but when the grind lasts too long it negatively impacts people’s motivations, relationships, priorities, and health. These people found their early supporters disappeared over time, caught up with their own issues and lacking band width to help others in crisis.

What this group tells us is that even our strongest members need support. We cannot take for granted that our healthcare workers, educators, and service entrepreneurs can carry on forever without help and recognition of their stakeholders. This group reminds us the strongest communities and teams, not the strongest individuals, are the ones that win in the end. We all have our limits (physical, mental, financial), and we need to care for each other even more in crisis than we do normally. Watching the people of Ukraine (with the help of the free world) survive Russia’s unprovoked and genocidal invasion of their country is a great example of extending mutual support. Greedy landlords sucking tenants dry in a financial crisis is the opposite.

Who do you know in this group that could use your support? Reach out. You too will win because if they carry on you can continue to enjoy their services. If you see others throwing sand in their gears and making it hard for them to survive in the face of crisis, consider how you can help remove some of their problems. Even if you can’t remove problems, remember just allowing them to talk to you about their situation helps them get through it better because as they say, a problem shared is a problem halved.

7. Surrender to Fate “The Surrenderer”

People who feel very vulnerable and risk averse have had a tough time during this global pandemic. To make matters worse, they see war, climate change and recession in the news and it makes them feel even worse. In my experience Chinese are more prone to believe in fate than are Westerners and it seems the depth and duration of this crisis has made it particularly hard for this group in HK.

In this group there were an awful lot of suicides and attempted suicides, three of which I had to contend with in my neighbourhood. Although statistically the total number of suicides remained relatively stable, the number of suicides for people over 60 and under 24 increased through the crisis. The elderly and youth are the two groups struggling the most but for different reasons.

Despite Confucian respect for elders, it seems to me the low vaccine take-up amongst the elderly and the way covid decimated people in old folks homes left many elderly feeling undervalued. The youth watched how the government dismissed their valid complaints and protests and as a result they too feel undervalued. The Chief Executive at the time said the youth don’t have a stake in society but she forgets the children are our future.

Many people in this group seemed to have unsurmountable financial difficulties, lack support from family or friends, lack of hope and belief in the alternatives available to them. Depression and mental illness are high in this group. Closing the gyms, schools, and live music at the height of the crisis didn’t help either. There was not a week during the crisis when I didn’t witness a mental breakdown of some sort. Mental illness and surrendering to fate take a toll.

Families and societies around the world have learned a tough lesson through this crisis. Change leaders need to ensure support is provided to people who feel they are victims of change. We all need support at some point. We need to do a better job looking after each other. We need to learn to ask for help and we need to recognise the signs of depression in ourselves and others. The saddest aspect of this crisis has been the people and organisations we have lost since 2019. Getting your team, community, or society through an important challenge is best when everyone succeeds together. Just remember Argentina and Lionel Messi winning the World Cup in December 2022.

8. Cut and Run “The Runner”

The last group to describe is perhaps that which has received the most publicity and is the most recognisable. It is the people that dropped what they were doing and left HK (or left the job market) in record numbers during the crisis. Although everyone cuts and runs for their own reasons, there are some similarities that have become obvious to me. For one thing these people are risk takers because it isn’t easy to cut and run (quit and emigrate) all in one go. These people may feel average in strength because on the one feel strong enough to leave but also too vulnerable to stay.

Most international schools saw half their student roll leave HK during the crisis. A dramatic number of pilots left HK to work overseas and never return. Some people forecast the duration of the crisis and closed their businesses early but stayed in HK, possibly to retire early (or hibernate until spring). Many young democracy protesters fled HK due to what they perceived as the Communist takeover of HK.

Common to this group of people is the need to make a living, the need to feel wanted, and the need to agree philosophically with the direction of the company or society if they stayed. Most people can deal with hardship provided they see light at the end of the tunnel but most people in this group lost confidence in HK, divested, and moved away to sunnier shores never to return.

This group was a shocking reminder for me of the same thing I witnessed growing up in the English community of Quebec in the 1970s and 80s when the French Separatists began legislating hate laws against the English threatened to separate from Canada. A mass exodus resulted and only one or two members of my youth group containing 25 friends opted to stay in Montreal. I eventually moved to HK.

The result of this exodus is very expensive for HK. The current Chief Executive is already struggling to replace the talent he forced to leave. In a global war on talent no society can afford to lose its young people. The exodus has meant an inflow of talent to competing economies like Canada, the UK and Australia. The HK exodus has resulted in new beginning for the HK diaspora while leaving behind costs for others to pay (e.g., people left behind HK$ millions of bad debts in rent, tuition, and service fees).

This group reminds change leaders starting over is harder than people think and that the grass is not always greener on the other side. There are pros and cons of every choice and taking emotional decisions without working through the ramifications can cause more problems than you need. Some wish they had left sooner. Like starting a new business, the earlier you begin the faster you succeed. The other key point is that while it makes sense for some to cut and run, you should never burn your bridges on the way out because you never know when you may need the help of those you scarred in your hasty departure. HK Immigration have a list of people that will be arrested for unpaid bills if they ever return to HK. Likewise, landlords, employers, schools and service providers all retain a blacklist of customers that shafted them on their way out. This group reminds change leaders to make it easier for people that have to depart e.g., dialogue so there are no surprises.

The Data

· This article summarises the 8 types of response I observed in people and organisations during the period of severe change in Hong Kong lasting from the democracy protests of 2019 until the end of covid lockdowns in 2023.

· My observations are based on first-hand experience and will be validated by sharing my thoughts with the actual people and organisations I included in each group. If I learn anything new in dialogue with these people I will update my paper accordingly. The solution is in the dialogue.

If you have any thoughts or questions about my observations please let me know.

Kindly,

Peter

Peter Nixon FCPA, professor, corporate trainer, author, speaker, consultant +852-9188-0056;

“the quality of our dialogues today determines the quality of our future tomorrow”

Peter has helped tens of thousands of leaders in >600 organisations & 60 countries worldwide to achieve optimal outcomes through improved decision making based on dialogue, negotiation, and leadership. Peter is a Canadian citizen currently resident in Hong Kong.

Text - How do you react in crisis? The Case of Hong Kong 2019-2023