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Hong Kong’s ‘yellow’ businesses see persecution in coronavirus crackdown

Hong Kong, China – In Hong Kong’s bustling Mong Kok district, customers flocked in and out of bars and restaurants during a busy summer weekend recently.

But at Shinko, a popular Japanese izakaya restaurant, there was no customer in sight.

The restaurant was forced to shut down night services for 14 days, after a customer failed to provide a valid vaccination record during a police raid in mid-July.

While other restaurants have received similar penalties under Hong Kong’s pandemic rules, which include long-standing restrictive measures that were abandoned elsewhere, Shinko’s owners are convinced they have received disproportionate scrutiny from authorities for their political beliefs.

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Hai, one of the co-owners of the restaurant, told Al Jazeera: “The business environment in Hong Kong makes me feel helpless, and it makes me wonder if the authorities want to prevent us from doing business in Hong Kong.”

Shinko is among the companies in Hong Kong that supported the 2019 mass pro-democracy protests, which began as peaceful demonstrations against plans to allow extraditions to China before turning into a broader movement that saw violent clashes between protesters and police.

Companies like Shinko are known locally as being part of the “yellow economy” – yellow is the color associated with pro-democracy sentiment in the Chinese-ruled city.

Inside Shinko, Japanese-style izakaya.
Shinko, a Japanese izakaya, was forced to stop night-dining services for 14 days after a customer failed to provide a valid vaccination record during a police raid. [Courtesy of Lok-kei Sum]

Once an integral part of the political landscape, Hong Kong’s pro-democracy movement has been largely silenced since Beijing imposed a strict national security law on the territory in 2020.

Despite China’s promises to leave the rights and freedoms of the former British colony intact after its return to Chinese rule, most of the movement’s leaders were arrested, stripped of office, or forced into exile. The media and civil society, once widely seen as some of the freest in the region, are increasingly following the government’s line.

For the “yellow” companies, many of which were notorious for displaying pro-democracy tools during the 2019 protests, the city’s new reality means passing scrutiny from Beijing aides. These include its mouthpiece media, which often accuses institutions of defying government restrictions on the coronavirus and of “spreading separatism” by displaying protest slogans and banners.

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Hay, who asked that her full name not be used, said her business has strictly adhered to government restrictions on COVID-19 to avoid complications, in part because it expects more scrutiny, and is hiring additional staff to check clients’ vaccination records.

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But she said her restaurant still gets more attention than others in her neighborhood, as the establishment has undergone five pandemic-related inspections since July alone.

Under Hong Kong’s strict epidemic rules designed to align with China’s “zero COVID” strategy, customers who break the law can face a fine of HK$5,000 ($637), while the relevant institution’s working hours can be restricted for 14 days. Patrons entering bars must also submit a negative COVID-19 test from the past 24 hours, with owners required to meet technical requirements for ventilation and air purification.

Hee said some “yellow” business owners are trying to keep a low profile on social media to avoid drawing the attention of authorities.

“But I realize it’s not helpful,” she said, “No matter how small you are, if they need to deal with you, they’ll come.”

Shinko’s owner says Hong Kong’s business environment has left her feeling ‘helpless’ [Courtesy of Lok-kei Sum]

Both the Hong Kong Police Force and the Food and Environmental Health Administration (FEHD) are conducting inspections to comply with COVID-19 restrictions.

From March 2020 to August 2022, the police conducted more than 52,000 searches, resulting in 890 recalls, 3,258 violations and 638 prosecutions. The FBI said it conducted more than 605,000 searches, resulting in 2,432 prosecutions. It also said 1,257 catering companies faced “timeout” penalties.

When asked what criteria should be followed in selecting a company for inspection, police said details of their operations “will not be disclosed”, but that officers will act “on the basis of actual circumstances” and in accordance with the law.

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“The sole objective of police operations is to appeal to the public to strictly follow the relevant regulations in order to reduce the risk of spread [the] A police spokesman said.

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Despite her actions, Shinko was penalized after a raid in mid-July and had to stop dining services after 6 p.m. Hay said her staff checked clients’ vaccination records upon entry, but the client failed to provide a valid QR code when questioned by police.

The suspension of dining services cut Shinko’s acquisitions in half, resulting in a six-figure loss. There is currently no way for companies to challenge the sanctions against them.

While the official guidelines require institutions to verify clients’ vaccination records prior to acceptance, they do not state whether owners are expected to verify these records.

“If a worker exercised his due diligence in scanning a QR code of a customer that turned out to be fraudulent, the amount of HK$5,000 [$637] A FEHD spokesperson said: “A fixed fine notice will be issued to the customer.”

Chickeeduck founder Herbert Zhao
Chickeeduck founder Herbert Chow left Hong Kong in May after one of his stores was raided by police [File: Tyrone Siu/Reuters]

In the future, Hei said, her staff may have to check people’s ID cards to match their names to their vaccination records, although many chain restaurants simply get around to asking customers to scan their vaccine card upon entry.

Some entrepreneurs have chosen to close their doors and move abroad. Herbert Chow, the pro-democracy businessman who owns clothing and retail chain Chickeeduck, left Hong Kong in May after police raided a store that prominently displayed a protest slogan.

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In August, Chickeeduck, which has been repeatedly identified as a national security threat by pro-Beijing media, announced that all of its stores would close after rental contracts ran out.

Despite his promise to return to Hong Kong, Zhao later announced on social media that he plans to resume his career in the UK.

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Others have sought a fresh start in neighboring Taiwan, including 37-year-old Teddy Ng, who owned an online catering and retail business in Hong Kong.

In July, Ng announced that his nearly 10-year-old restaurant would be closing after the lease expired in September. His online retail website, which employs 25 people for his restaurant, will also be gone.

While Ng said he is proud that the restaurant survived the pandemic, he is disappointed with government policies that have pushed it away.

“COVID restrictions are interfering with our daily operations, but are they effective?” Ng told Al Jazeera, adding that Hong Kong has failed to keep pace with the global trend towards coexistence with COVID-19.

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While Hong Kong earlier this month introduced a mainland China-style health code for entry to establishments such as bars and restaurants, countries such as the United Kingdom, France and New Zealand have long rescinded vaccination permits. Despite its nickname “Asia’s cosmopolitan city,” Hong Kong is among the few jurisdictions that still require arrivals to undergo hotel quarantine.

Although Ng’s move to Taiwan means abandoning a decade of business ties and his customer base in Hong Kong, he finds the new environment less tense and hopes to open a restaurant in Taipei by October.

Like Shinko, Ng Restaurant in Hong Kong has also been targeted by pro-government media and has been subject to frequent searches. He said Hong Kong is no longer truly a free market due to political sensitivities and COVID-19 restrictions in the city.

“That’s why we’re willing to let go of all these things and start over in a new place,” Ng said.

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