Hong Kong confirms recession as protests and trade war continue

Hong Kong confirmed on Friday it plunged into recession for the first time in a decade following months of anti-government protests and the U.S.-China trade war.

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Third quarter figures showed the economy shrank by 3.2 percent from the preceding period.

That makes it a second straight quarter of contraction, meeting the technical definition of a recession.

With no end to the increasingly violent protests in sight,

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Analysts tell Reuters the slump could be long and deep, with gross domestic product seen shrinking further this quarter and well into next year, if violent protests continue.

Students with their homemade gears take their position outside the Chinese University of Hong Kong, in Hong Kong, Wednesday, Nov. 13, 2019. Protesters in Hong Kong battled police on multiple fronts on Tuesday, from major disruptions during the mornin

The economy contracted 2.9 percent from a year earlier, matching the preliminary reading. The readings were the weakest since the global crisis.

Economic issues include: Tourists canceling bookings, a sharp drop in retail sales and the China economic slowdown fueled by the trade dispute with the U.S.

Protests paralyzed parts of the city for a fifth day on Friday. Transportation disruptions are now common and retail stores have been closing early.

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Hong Kong is an important financial hub with total banking, fund and wealth management assets worth more than $6 trillion, according to Reuters.

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