The article is part of the 'Hong Kong Anti-extradition Demonstrations: One Year Ago Today' initiative which aims to raise awareness for the movement and also to debunk some myths regarding the movement’s origins and core elements.

This article forms part of the five-part investigation conducted around the ‘yellow economic circle’. For more information regarding the movement’s origins, impacts, sustainability and debates over its economic versus political classification, please refer to the links below.

NEWS articles:

• #YellowEconomicCircle #黃色經濟圈

INSIGHT articles:

• The ‘Yellow Effect’ - Increased sales in ‘yellow shops’ and decline in support and retail in ‘blue shops’: how successful has the ‘yellow economic circle’ been in achieving its aims?

• The ‘yellow economic circle’: contingency or conditionality? How the ‘yellow economy’ must transform itself for survival

OPINION articles

• The ‘yellow economic circle’: a social movement that utilises economic means to achieve political ends

PART ONE: The economic debate

The ‘yellow economic circle’ as a recipe for economic self-sufficiency: its economic activities as abiding with the capitalist principles of the free market economy and simply a deployment of personal agency - a not so unfitting novelty when considered with a global outlook

Oppositions to the validity of the ‘yellow economic circle’ often challenge its ability to uphold capitalist principles of free market economy and critique its violation of the Western Liberal Order. It not only dismisses the movement as a recipe for economic self-sufficiency and instead condemns exercises of personal agencies as aggrandizers of socio-political chaos. However, a compelling argument can be made for the movement’s rhetoric being backed strongly by widely-accredited economic theories and its proliferation is non-exclusive to Hong Kong’s economy.

Free market economy and Capitalism

Defined by features of a market economy, transparency and separation of state and business, features of the Western Liberal Order can be observed in the ‘yellow economic circle.’ Advocating a distinct set of aims and principles, the operational features and activities of the ‘yellow economic circle’ are arguably in direct accordance with the movement’s architrave.

Principles of the free market economy are upheld by the ‘yellow economic circle’ in its deployment of the ‘invisible hand.’ As advocated by Adam Smith, in a free market economy self-interested individuals operate through a system of mutual interdependence. The patronisation of shops and enterprises that match the individual’s personal preference is a voluntary action and becomes a means for individuals to achieve social wellbeing. In a free market economy, each free exchange creates signals about which goods and services are valuable and how difficult they are to bring to the market. Market segments that are strongly patronised remain in operation whilst the lesser are forced to close. Those which remain essentially represent consumer preferences and needs. In the case of restaurants within the ‘yellow economic circle’, consumer’s choice is based on preference for food quality, environment, atmosphere, customer service and location. If the political stance of the restaurant adds to their dining experience, there is no reason why it does not abide by the capitalist principle of free market economy.

Moreover, drawing on Caroline Heldman’s theories of ‘Consumer Activism’, the ‘yellow economic circle’ is arguably a form of active pressure on enterprises and shop owners to ensure that their operational strategies are in line with social values and public interests. Its aims of breaking the monopoly of the pro-China consortium is a prime example of this.

Large pro-China consortiums pose a threat to Hong Kong’s economy due to their able control over media and influence on public discussion. Their strong influence in politics and policymaking raises greater public safety concerns. Through exploitation of democracy deficits, these groups are able to tilt government incentives to their own advantage such as that of prioritisation of corporate profits over those of the citizen’s wellbeing. The resulting government is unable to represent people’s social rights and further changes in the lifestyle, value orientation and identity of the citizens may occur.

As these private institutions are not obligated to uphold public accountability, these large consortiums violate a core feature of the Western Liberal Order - transparency. However, it is evident that the ‘yellow economic circle’ necessarily acts as the counter-narrative and its aims to break the monopoly of the ‘red capital’ reflect a strive for greater transparency and upholds the principles of the Western Liberal Order.

Personal agency

‘Personal agency’ refers to an individual’s capital to originate and direct actions for given purposes. Complete with notions of consumer rights and freedom of choice, ‘personal agency’ is interpreted as an individual’s rights to make choices based on their own preference or ‘taste.’ In the ‘yellow economic circle’, citizens are simply exercising their consumer’s rights to freedom of choice. When deciding to patronise a ‘yellow shop’, the consumer makes this choice voluntarily and their choice is based on their own personal values, priorities and in some particular cases, even political stance.

The theory of ‘utility maximisation’ proposed by George Akerlof in Identity Economics, opens up the debate further. Premised on the assumption that an individual’s identity results in identity-related behaviours which are further motivated by a desire to maximise personal utility, an individual’s choice is assumed to match their own personal preference and results in maximum personal satisfaction. Similarly, supporters of the ‘yellow economic circle’ are simply exercising their personal purchasing power when making an economic contribution to the cause whilst inadvertently achieving utility maximisation, or vice versa.

Furthermore, in the proliferation of the ‘yellow effect’, increased support for the ‘yellow economic circle’ merely reflects the changing needs and preferences of the consumers in the marketplace. Due to personal identification as ‘yellow,’ by the principles of identity economics, this further results in changes to an individual’s behavioural prescriptions. Those which identify as ‘yellow’ are more predisposed to patronise ‘yellow shops.’ When executed on a societal level, changes in social behaviours justify its classification as a ‘social movement’. Besides, people are just making choices on where to eat and drink, why the stress?

Global proliferation: a debate over circles and changing ‘boundaries’

Adopting a total economic approach to the analysis of the ‘yellow economic circle’, many have classified the movement as a mutation of the global phenomenon, coloured economies. ‘Coloured’ economies exist everywhere across the globe. Defined by exclusivity in race, culture and religion, it has further been proposed why the ‘boundary’ of ‘political stance’ can’t be used to define the new ‘yellow economy’ developing in Hong Kong.

To demonstrate the globally-acknowledged usages of race, culture and religion as ‘boundaries’ in forming various exclusive economies, we will analyse the origin and proliferation of the economic circles of the Pink Economy, Fair Trade, and finally, Islamic Finance.

The ‘Pink Economic Circle’

The ‘Pink Economic Circle’ or the Pink Economy refers to a collection of corporations that deliberately strategises to target LGBT consumers. A market research report published in China indicated that LGBT friendly policies are the most important factor in positively influencing purchasing decisions by the LGBT community.

Fair Trade

Similar to the system adopted by the Pink Economy, Fair Trade was founded by a collection of NGOs to promote greater equity in international trade and raise awareness for trade injustices in politically and economically marginalised economies. At first, Fair Trade products were sold exclusively by Fair Trade Organisations until the adoption of the Fair Trade label (currently known as the WFTO Product Label). Products with the Fair Trade label are certified by the organisation as compliant with the Fair Trade Standard and uphold the relevant ideals and values. In purchasing a WFTO product, consumers indicate their support for the same ideals and values upheld by the movement’s ethos. The economy formed by Fair Trade relies on boundaries set out by consumer values and priorities.

Islamic Finance

Islamic Finance refers to the financial system that operates according to Islamic Law (or Sharia Law). The collection of corporations within the economy actively discourages pecuniary transferals to non-Islamic banks. Instead, it encourages Muslims to deposit in certified institutions that can guarantee that the deposit will not be loaned to pork, alcohol or gambling institutions. The profits of these institutions come from loans from lenders rather than interest, which is prohibited by the Koran. The exclusivity of Islamic Finance relies on a religious ‘boundary’.

(Other examples of ‘economic circles’ include the ‘Green Economic Circle’ and groupings of anti-animal-testing supporters, conservationists, anti-sweatshop-labour supporters and even industries of veganism and vegetarianism)

However, it should be noted that there are distinctions between the ‘Pink Economic Circle’, Fair Trade, and the ‘yellow economic circle.’ Instead of the movement being broadly a marketing strategy initiated by the corporates themselves, like in the cases of Pink Economy and Fair Trade, the movement in Hong Kong is regarded more as a ‘bottom-up’ movement and is facilitated by the consumers themselves. Moreover, it distinguishes itself from Islamic Finance due to its secular nature.

To give an example closer to home, the ‘economic circle’ consisting of Filipino and Indonesian domestic workers in Hong Kong essentially forms a subsection of Hong Kong’s economic system. Separate from the dominant ecosystem, this ‘economic circle’ is equipped with its own individual food industry, grocery stores and dominates a moderate collection of foreign currency exchange and mobile phone stores. Due to its exclusive supply chain, their ‘economic circle’ is self-sufficient and its different aspects work in unison to provide for the Filipino and Indonesian communities in Hong Kong.

In consideration of the movement’s primary aims, the ‘yellow economic circle’ was set out to support the Anti-Extradition demonstrations with a long-term goal to achieve self-sufficiency and establish an independent economy. Its current economic activities comply well within the Western Liberal Order and uphold the capitalist principles of the free market economy. Not only have similar movements been identified across the world, the ‘yellow economic movement’ is not all that distinctive from other social movements and phenomenons. For the general public participating in the ‘yellow economic circle,’ it seems preposterous to condemn them from exercising personal agencies within a framework evidently compatible with Hong Kong’s stated regime.

PART TWO: The political debate

Proportionate extremities in opposition to the ‘yellow economic circle’ are rooted in a plethora of both groundless speculations and allegations. However, these observable concerns all seem to rest on the same focal point; that the ‘yellow economic circle’ functions as a political tool and which ‘strive to change a population's presence through change in identity or prescriptions.’ By the same rhetoric, ‘politics is often a battle over identity’ and the movement’s increased support, as well as political implications, validates its strength as a force for political change.

However, opposition to the ‘yellow economic circle’ have further interpreted its economic activities as a demonstration of political strength and accused the movement as being ‘culprit’ behind worsening socio-economic conditions and ‘inciter’ of political ruminations; both a driver of political chaos and an inhibitor of social change.

Hong Kong Liaison Office: Statement of Condemnation

In a statement of condemnation published by the Hong Kong Liaison Office on May 2nd, the officials openly condemned the ‘yellow economic circle’ as a political movement. It aggressively denounced its involvement in inciting political chaos within Hong Kong’s society as well as aggrandising various political narratives for individualistic political gains.

However, it should be regarded with caution that the intent behind the statement remains unclear. Whilst some contend that the statement was published out of fears for Labour Day protests, others entertain the speculation that the documents play host to a series of underlying political motivations - one of which is that by inciting political chaos amongst the citizens, the Chinese government gains greater legitimacy for use of power to implement policies in Hong Kong in the future.

In the statement, the Liaison Office not only accuses the pro-democrats of ‘hyping up’ the ‘yellow economic circle’ and failing to deliver principles of free market economy by depriving consumers of their rights to freedom of choice. It conveniently neglects the disruptions caused by Coronavirus and blames the actors for the high unemployment levels and various economic closures that have recently plagued Hong Kong’s worsening economy. It further insinuates that the ‘yellow economy’ is responsible for inciting political chaos, raising social fears amongst the citizens as well as enhancing greater tears in Hong Kong’s socio-political climate.

Contrastingly, amongst fears of reduced autonomy and the potential violation of the Basic Law, supporters of the anti-extradition demonstrations and the ‘yellow economic circle’ have found sanctuary in the statement of condemnation as recognition of the ‘Hong Kong threat’. It not only validates the efficacy of the ‘yellow economic circle’ but also the successes of the pro-democrats in their pressurisation of the government for socio-political change.

Through condemnation of the ‘yellow economic circle’ as an attempt to incite political chaos and social fears, the statement explicitly recognises the ‘economic circle’ and validates it as a force to be reckoned with. In their apparent equation of what are arguably capitalist marketing strategies as a display of ‘political kidnapping’ of the economy and extrapolation of the ‘yellow effect’ as an advocate of ‘mutual destruction’, it is obvious from the sentiments expressed that the Liaison Office perceives the ‘yellow economic circle’ as a threat to socio-political order.

It further accused the opposition of ill intentions, exploiting the narrative of the ‘yellow economic circle’ for personal gains and to win seats in the Legislative Council Elections in September 2020. The statement’s inclusion and reference to the political buzzword, ‘mutual destruction’ (攬炒)- alternatively known as the ‘burning with the enemy’ mentality - is further indicative that the strategic propaganda campaign conducted by the pro-democrats in attempts to encourage greater registration of voters through promoting themselves as harbingers of ‘mutual destruction’ was effective and impactful.

The ‘yellow economic circle’ as a driver of political chaos: a tool for political suppression, incitation of ‘mutual destruction’ and ultimately a political call for ‘Hong Kong independence’ disguised by seemingly apolitical economic activities

Tool of political suppression

The ‘yellow economic circle’ has often been regarded as a tool of political suppression due to its exploitation of the rhetorics behind ‘coloured politics.’ It argues that the movement’s aggressive economic activities and system of classification into two political camps exclusively target the suppression of pro-China supporters. In distinguishing between ‘yellow shops’ and ‘blue shops’, it not only violates principles of the free economy by depriving people’s freedom to exercise their consumer rights but further causes distortions in political opinion and an imbalance in ‘neutrality.’ Stores that previously identified as politically neutral have been forced into identification as ‘yellow’ to protect their livelihoods and their personal safety. In using political attitudes as a method for classification, certifying shops and enterprises with yellow labels and encouraging the public to follow example, it puts on an apparent display of ‘economic blackmail’. Allegations of more extremist methods being exploited such as those of black-handed extortion of companies, forcing them to make political statements and adopt a political stance are not uncommon amongst opposition to the ‘yellow economic circle’. Due to these speculations, many regard the ‘yellow economic circle’ as a demonstration of uncivilised, barbaric and discriminatory behaviour.

Incitation of ‘mutual destruction’ (攬炒)

The statement of condemnation published by the Liaison Office employs this narrative of ‘mutual destruction’ and its inclusion is further indicative of the term’s prominence. Many pro-China sources have further expressed beliefs that the ‘yellow economic circle’ entertains this rhetoric and aggrandises the process of ‘mutual destruction’ between the government and the people of Hong Kong. A spokesperson for the Liaison Office quoted a poll which showed more than 70% of Hong Kong opposed ‘mutual destruction’ and more than 80% of people expressed sentiments of anxiety for the future. The significance of the figures stated being the sheer prominence of the political buzzword and its associated implications.

However, speculations have been sown over the statement of condemnation as an open provocation for actual mutual destruction. The aggressive language of the condemnation and the inclusion of political buzzwords has been interpreted by some as a ‘threat’, challenging the people of Hong Kong to a future reduction in freedom to consumption and potential elimination of its capitalist system.

Political call for ‘Hong Kong independence’ disguised by seemingly economic activities

As aforementioned, the statement of condemnation issued by the Liaison Office went as far as to critique some opposition politicians for ill intentions, exploiting the narrative of the ‘yellow economic circle’ for personal gains and to win seats in the Legislative Council Elections in September 2020. Amongst counter-narratives, many have isolated this idea further and rekindled speculations over the intent of the document’s publication.

In light of the upcoming Legislative Council Elections, it is possible that the statement was published out of fear of losing seats in the catering and retail industries to supporters of the ‘yellow economic circle.’ Partially a consequence of the ‘yellow effect,’ increased support from individuals in catering and retail industries can play a vantage for the pro-democrats during the upcoming elections.

Understanding the makeup of Hong Kong’s legislative council, functional constituencies and the importance of the retail and catering industries in the upcoming Legislative Council Elections in September 2020

Hong Kong’s Legislative Council consists of a total of 70 seats which are split equally between seats selected by geographical constituencies and those through functional constituencies (alternatively known as ‘professional representation’). In these 35 seats belonging to the functional constituencies, only 5 are elected by the majority of the public whilst the remaining 30 are elected based on their profession.

The relevance of the functional constituency to the ‘yellow economic circle’ is related to the demands for its abolition before the elections in September. Whilst, in theory, the inclusion of various industries, including catering and retail, can make the resolutions of the Council more representative in nature, in practice, due to the seat’s selection criteria often demonstrating patterns of wealth and investment, the resulting council reflects an uneven distribution of professions and do not truly reflect the opinions of all the citizens engaged in the represented industries. For similar reasons, the system of functional constituency seats has been accused of violating the principles of universal suffrage and democracy. When it became obvious that calls for its abolishment were futile, parties reshifted their focus onto the voters and encouraged greater levels of participation in national politics from professionals.

Gaining the support of retail and catering industries are important steps for the pro-democrats in increasing their number of seats in the Legislative Council. This not allows them greater influence over future government policies and actions but further works towards improving the quality of deliberations and likelihoods of passing government bills.

For more information on Hong Kong's Legislative Council and functional constituencies: https://edition.cnn.com/2016/08/31/asia/hong-kong-legislative-council-explainer/index.html)

Supporters of this political narrative have coupled the functional aims of the ‘yellow economic circle’ with those of political gains in the upcoming elections. Whilst deserving of qualification, the potential remains for the purposes of the economic activities conducted as vouch for democracy. With increased political power, pro-democrats are likely to use this increased influence to strive for ‘Hong Kong independence’; a continuous movement made more attainable with increased influence in government.

A certain degree of difficulty is incurred when evaluating the implications of the ‘yellow economic circle’. To homogenise all the individual actors involved in the movement as a singular force, a driver of political chaos, is a massive generalisation and deserves further qualification. Whilst some plausibility can be reserved for when contending the motivations of various actors for their active promotion of the ‘yellow economic circle’, it remains the case that motivations differ depending on the actor, their power, and agency.

The ‘yellow economic circle’ as an inhibitor of social change: corrupter of Hong Kong’s economy, culprit for causing civil unrest and raising social fears amongst its people.

Alternatively, when decoupled from its peaceful economic activities, the ‘yellow economic circle’ has often been portrayed as the main contributor to the worsening of Hong Kong’s economy and social climate. Through isolating the movement’s apparent involvement in violent activities, the narrative of the ‘yellow economic circle’ shifts and refocuses on its associations with violence and activism.

Corrupter of Hong Kong’s economy

Many sources have expressed pity over the situation of Hong Kong’s worsening economy, stipulating that the observable dissent of the socio-economic order is due to the actions of these violent activists. This narrative argues for participants of the ‘yellow economy’ to be all ‘violence and activism supporting enterprises and shops’.

Of noticeable strength is the rhetoric evident in an article published by the TaKungPao, a Chinese media company owned and run by the Hong Kong Liaison Office. The article (excerpts copied below) implicitly challenges Hong Kong’s ability to uphold the Western Liberal Order. Defined by features of a market economy, transparency and separation of state and business, the article denounces the legitimacy of the ‘yellow economic circle’ in its ability to uphold principles of the free market economy and argues that Hong Kong’s economy has been corrupted by activists who have coupled ‘business’ with ‘politics’.

當然，不能否認香港有極個別人將生意與政治捆綁，辦張報紙、搞個研究會，立足點放在推翻國家制度上，他們搞的不是經濟活動，而是赤裸裸的政治交易。

It not only qualifies the economic activities of the ‘yellow economy’ as mere ‘political exchanges’ but further insinuates that they are using ‘economic activities’ as a guise to cover up their underlying political motivations.

香港人懂得生意之道在於和氣生財，尊重周邊地區的法治與文化，不將政治凌駕在經濟之上，更不會與賺錢過不去。這才使香港出現了世界華人首富、五百強的翹楚等一批商界知名人士。香港地域狹小，資源有限，集世界之大全成就香港之大成，這是成功商人的秘訣，也是香港的成功王道。

Her analysis begins with open praise of Hong Kong’s economic prosperity as being the fruit of the people’s ability to maintain harmony, respecting the different rules of laws and cultures in neighbouring areas and its predisposition to not let politics impede economic benefits and business relations. This proclamation could be interpreted as a deliberate set up for a later downfall in Hong Kong’s discursive narrative. Its nuanced reference to features of the Western Liberal Order is a subtle critique of Hong Kong’s regime, and which further implies a perception of the supporters of the ‘yellow economic circle’ as not only corrupters of Hong Kong’s economy but also destroyers of Hong Kong’s political harmony.

Culprit for causing civil unrest and raising social fears amongst its people: the ‘violence is rational’ mentality

Continuing on the same rhetoric, many have condemned the economic activities of the ‘yellow economic circle’ as a series of exploitations of violence to damage the pre-existing order and thereby continuing a ‘violence is rational’ mentality. Whilst its accountability remains questionable, data published by the police revealed that since October last year an estimate of 950 sites have been destroyed and more than 1,100 reports received where properties have either been set on fire or robbed. Additionally, the police arrested a man mid-December last year who was allegedly encouraging others to go destroy shops on social platforms.

Whilst not representative of the entire ‘yellow economic circle,’ the evidence above supports previous allegations of violent attacks and vandalism on shops by actors within the ‘yellow economy’. Motivated by aims of getting companies to change political stances through threatening messages and violent activities, further speculation has opened up over the nature of the ‘yellow economy’ as simply an opportunity for conducting illegal activities and exploitation of funds procured from its economic activities. Under similar allegations, the police had previously accused funds set up to support the anti-extradition demonstrations of ‘money laundering’ and proceeded to freeze their bank accounts.

Accusations for the ‘yellow economic circle’ being an inhibitor of social change is backed by a narrative of extremities. This perception conveniently limits room for challenge and contention of other factors at play. To equate the supporters of the ‘yellow economic circle’ to supporters of violence and activism is an oversimplification of the issue and fails to consider the economic benefits and positive social cohesion that is proffered by the ‘yellow economy’ and its community of shops, enterprises and consumers.

Editors' Note: As a blanket disclaimer for the entire ‘Hong Kong Anti-Extradition Demonstrations: One Year Ago Today’ initiative, we will not be disclosing the identities of any of the contributors to the initiative. We thank everyone who has submitted a piece of their own work and we apologise for not being able to openly accredit you for your contributions.