Photo: VCG

Hong Kong has reached a critical moment as investors moved capital out and events were canceled following the city's spiral from social unrest to riots 

A recent report from Goldman Sachs estimated that $3 billion to $4 billion may have flowed from Hong Kong to Singapore in the three months up to August, which the investment bank said “is still small” compared to the Hong Kong dollar and US dollar deposits in the city.

The city, as Asia's business hub, trade-fair capital, and convention hub, has been engulfed in months of protests, which have grown violent. Countless  clashes between black-clad rioters and frontline police officers; vandalism of  public property, stores, banks, and ATM machines; and mass arson heavily affected business confidence of investors. 

Analysts have pointed out in the report that Hong Kong's banking system still has ample liquidity in both Hong Kong dollars and foreign currencies. This set of data is unlikely, however, to allay investor concerns around outflows from the city. 

On Thursday, the Hong Kong Tourism Board canceled the Hong Kong Cyclothon and Hong Kong Wine and Dine Festival this year amid ongoing social unrest, according to local media. Industry representatives said the cancelation of such events would further deteriorate Hong Kong's image, and cause damaging ripple effects. 

The number of attendees to the Hong Kong watch fair reportedly has slumped to double digits last month, and the smaller scale Asia seafood exhibition was canceled as violent protests have gripped the streets every weekends. 

Several major economic indicators show that Hong Kong's economy continued suffering as retail sales slumped to historic lows in August, and the number of tourist arrivals has dropped. Hotels and restaurants have created more discounts to attract customers while small and medium-sized businesses, as well as stores, lobby landlords to reduce rental fees amid this challenging time. 

As sales dwindled, retail rents in both core and non-core areas declined in the third quarter of 2019, led by a 7-percent drop in Causeway Bay which has been hardest hit from declining tourism and interruptions to business due to social unrest, media reported on Thursday. 

With tourist arrivals expected to remain muted in the fourth quarter, the industry forecasts rents in Causeway Bay to fall between 11 percent and 13 percent for 2019.