Hong Kong Sparks Taiwan Volatility

Online activity related to cross-strait relations spikes amid extradition bill protests.


Over the past week, more than a million Hong Kong residents have taken to the streets to oppose a bill that would allow the extradition of Hong Kong residents to the Chinese mainland. The protests are Hong Kong’s largest since the city reverted to Chinese Communist Party rule in 1997. Predata signals now show that the upheaval has implications beyond the issue of Beijing’s relations with Hong Kong.  

First, the Hong Kong protests have sparked increased online activity related to China’s relations with Taiwan. A signal tracking the salience of cross-straits relations in the digital realm last rose significantly in January, after Xi Jinping reiterated his goal of unifying Taiwan with China. In the wake of the Hong Kong protests, the signal is now again climbing.


More specifically, internet users appear to be considering the implications of the Hong Kong unrest for the future of Xi Jinping’s vision of incorporating Taiwan into mainland China. Online activity on web pages related to the issue of unification rose to its highest level of the year, higher even than the reaction to Xi’s explicit statement in January.


This heightened signal activity suggests that either the Hong Kong protests have emboldened internet users in Taiwan to oppose China, or that they have stoked expectations that Beijing may try to extend greater control over Taipei. Either scenario entails heightened volatility in cross-strait relations.

Meanwhile, even though the Hong Kong chief executive officially suspended the extradition bill on Saturday, a Predata signal capturing scrutiny of the government remained elevated, indicating the pressure was unlikely to abate. The next day, an even greater number of people took to the streets (organizers said 2 million, the police said 338,000) to demand the bill’s complete withdrawal and the resignation of the chief executive.


Moreover, Predata market intelligence research has found the unrest may have implications for the Hong Kong dollar’s trading band. Contact us to find out more.