Crisis still has potential to spill beyond Hong Kong

Yesterday’s announcement by Hong Kong Chief Executive Carrie Lam that the government will withdraw the controversial extradition bill that sparked the current political crisis has raised hopes that tensions in the territory will start to subside. But given how the demands of protestors have escalated in recent months, this may not mark the end of the crisis. A further escalation in tensions that triggers capital flight and a drop in global risk appetite could lead to problems for countries with weak external positions, most notably Indonesia.