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How the Yellow Economic Circle Can Revolutionize Hong Kong

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How the Yellow Economic Circle Can Revolutionize Hong Kong

Building the grassroots economic movement could be the key to breaking the establishment’s economic stranglehold.

How the Yellow Economic Circle Can Revolutionize Hong Kong
Credit: Pixabay

Behind the clashes on the streets that have captured international attention, the anti-extradition bill protests last year have spurred a movement permeating different aspects of Hong Kongers’ lives.

The Yellow Economic Circle (YEC), which grew out of the movement, is a collection of businesses openly promoting protest messages. The businesses often are small local eateries with pro-democracy posters and attract supporters who want to continue the movement.

The YEC worked well during the May 1 “Golden Week” holiday, when mainland Chinese shoppers traditionally flock to the city. While mainland shoppers were scarce due to COVID-19, the business at “yellow shops” were booming — long queues formed outside eateries following activists’ calls for support in this difficult time.

Despite many challenges, the YEC potentially could flourish into a global ecosystem, detached from the influence of the Hong Kong government and big enterprises, and shape the city’s future.


The first challenge will be the opposition of authorities to this grassroots economic resistance. The Hong Kong government selectively enforced social distancing policies on yellow shops to sabotage their businesses. This exposed a bigger issue of the YEC: that is, it still operates within the established economic infrastructure despite its goal to diverge. That creates a weakness for the government to exploit: from halting business permits to manipulating financial regulations. In an earlier case, a non-profit group funding legal aid to protesters was charged with money laundering.

Another challenge is internal divisions within the movement itself. The premise of the YEC requires comprehensively identifying yellow businesses. However, there is yet any fair methodology to define a yellow shop or to judge whether one shop is “more yellow” than another. Ambiguities exist in defining businesses – for example, owners might back the movement but their mother companies, partners, or suppliers could be pro-establishment. Solely relying on customer feedback to identify the political stances of local businesses isn’t a quick fix to the problem; moreover, it may promote online shaming and a call-out culture in pursuit of ideological purity, which will polarize the pro-democracy camp and ultimately catalyze the collapse of the circle when the momentum goes down.

In lieu of witch-hunting, the YEC’s priority should be converting more businesses to participate and include more middle-ground civilians to promote the cause. Currently, pro-establishment businesses hoard the majority of Hong Kong resources. A complete separation from them would limit the YEC’s development.

Opportunities and Vision

Even with an economy dominated by the pro-Beijing establishment, the pandemic-induced economic crisis has created opportunities for social transformation. Hong Kongers should continue to take advantage of their information technology expertise, boundless creativity, and global connections, as they have in the protests; this will develop the YEC in several stages.

The first step is expanding the community economy’s reach online. After the landslide victory by the democrats in the November District Council election, many district councilors are using their newfound power to build a community-based economy that does not rely on mainland Chinese tourists. In the past, such an economy would consist of classic “cooperatives” earning money primarily from neighborhood customers. But, as seen during COVID-19, yellow eateries readily reached like-minded customers outside the neighborhood using delivery apps, and “yellow” delivery platforms and services have since formed. As online ordering becomes more common in everyday living, consumption of other goods can happen through this network. Once a critical mass emerges, these yellow businesses could revitalize the local economy and become the cornerstones of a robust community-led economy thriving at the intersection of the real and virtual worlds.

The second step is forming a “virtual enterprise” with small businesses. Big enterprises often weather the storm better than local corner shops do thanks to their better-franchised brand effect, better cash flow, economies of scales, and coordination along the supply chain. A “yellow business” label could only improve brand awareness among like-minded customers. Information technology can help the rest: electronic bulk-buy and pre-pay programs support cash flow and have already helped small businesses to stay afloat during uncertain times last year. Businesses in different industries (or along a supply chain) can band together to leverage the economy of scale to run promotion campaigns. As e-money is substituting for cash, this sets the stage for yellow businesses to form virtual collectives: they would have an edge over top-down enterprises for their bottom-up approach, giving them agility and responsiveness to market needs, epitomizing the “be water” mentality Hong Kongers have adopted as part of the protest movement.

The third step is opening up global job opportunities. The YEC aims to protect Hong Kongers’ livelihoods in a time when speech or an act of dissent risks workplace retaliation. The pandemic has revealed to the world the feasibility of remote work in a growing number of sectors. In the future, a design firm in the United States could work with a Hong Kong-based designer; a Hong Konger can take up a day job with the government and a second job with a firm overseas. This trend can unlock the labor force trapped in the few dominant industries in Hong Kong to diverse job opportunities in the world, and unchain Hong Kongers from the oppressive regime of China.

The fourth step is attracting investments. When diverse businesses flourish in the YEC and trust develops for the identity economy, larger fundraising initiatives become feasible. Private investment funds, having more freedom in their management, can provide funding opportunities for yellow businesses. A portfolio managed by qualified professionals can attract like-minded members of the middle class to invest in the YEC jointly. This would provide stronger financial protection and incentives for businesses to partake and shield it from suppression.

The YEC should also explore utilizing cryptocurrency. Cryptocurrency and blockchain technology have made tremendous advances in parts of the world that experience extreme oppression. In Iran, cryptocurrency is already popular with the public, insomuch that there are initiatives to set up a national cryptocurrency in response to U.S. sanctions. Iranians have discovered cryptocurrency is the only way to move money out of the country. As the YEC continues to grow, discussions about cryptocurrency in Hong Kong should be encouraged.

Finally, if Beijing continues its rapid assimilation plans to fully erode Hong Kong autonomy, what is Hong Kongers’ backup plan to preserve our own unique cultural identity? Ideas about rebuilding Hong Kong as an independent city-state elsewhere, away from China, have been conceived as early as in the 1980s. But in the era of the digital revolution, the new “Hong Kong” may not be confined to a singular geographical location.

A universal Hong Konger identity among the overseas pro-democracy Hong Kongers has been developing since the protests. This identity can serve as a force attracting all Hong Kongers in the world and building a virtual city whose citizens have no geographic barriers, pursue any livelihood they desire, and connect to the YEC through the internet.

Recently, Beijing’s office on Hong Kong affairs slammed the YEC advocates for politicizing the economy and polarizing society, but tracing the root of the YEC would prove this accusation is a case of victim-blaming. When the promise of “one country, two systems” is broken while dissidents are doxxed and retaliated against in their workplace, Hong Kongers are seeking a way to escape the oppression. Hong Kongers, with their rich resources and strong international networks, may build a future based on the YEC, where different facets of daily life are free from authoritarianism, truly realizing the “revolution of our time.”

Dr. Simon Shen is the Founding Chairman of GLOs (Glocal Learning Offices), an international relations start-up company. He also serves as an adjunct associate professor in the University of Hong Kong, Chinese University of Hong Kong and the Hong Kong University of Science and Technology, and associate director of the Master of Global Political Economy Programme of the CUHK.

The author acknowledges Jean Lin, Coco Ho, Stanley, Ah Gil, Daniel Cheng, Chris Wong and Alex Yap for their assistance in this piece.