Airline Cathay Pacific told to suspend staff taking part in Hong Kong protests

Hong Kong's protests are hitting its economy, the city's leader Carrie Lam said on Friday, echoing warnings from business leaders including powerful local property developers, as about 1000 mostly young activists occupied the airport arrivals hall.

China, whose rule over the city is being challenged by the protests, meanwhile demanded Hong Kong flag carrier Cathay Pacific Airways suspend staff involved in the demonstrations. One of its pilots was arrested last week.

The pair of warnings - one aimed at residents planning more marches still and the other at a business emblematic of the city's colonial past - mark a toughening stance by authorities as they grapple with Hong Kong's deepest crisis in decades.

Flanked by business leaders, chief executive Lam told reporters that companies in the Asian financial hub were "very worried" about the economic fallout from the protests, which began in June and have become increasingly violent.

"We have had two months of political dispute," she said after meeting business representatives and senior officials, warning that a downturn "is coming very quickly".

"Some people have described it as coming like a tsunami ... the economic recovery will take a long time," Lam said.

What started as an angry response to a now-suspended measure for criminal suspects to be extradited for trial in China has rapidly broadened to encompass calls for more democracy, Lam's resignation, and even keeping out mainland tourists.

The protests represent a populist challenge to Chinese leader Xi Jinping, just as an escalating trade war between China and the United States also hammers Hong Kong's economy.

Cathay warning

China's warning on Cathay, saying crew who engaged in the protests pose a threat to safety and should be suspended from staffing flights to the mainland, follows the pilot's arrest and tumbling bookings.

Cathay has said it is taking the directive seriously, though when asked about staff participating in protests last week, chairman John Slosar said the company "wouldn't dream" of telling staff "what to think about something".

Dozens of other Hong Kong companies have warned of faltering earnings, while city officials caution daily that the protests are hurting livelihoods and could help trigger a recession.

Lam said the city's Executive Council would next week resume meetings suspended in mid-June to prepare a policy response that would consider "daring measures".

"For Hong Kong's society to recover the foundation is the same [as that of the economy]," she said. "We must stop the widespread violence."

She urged landlords to ease rents on hard-pressed retailers, but dismissed demands for an inquiry into police behavior at demonstrations.

"I disagree with (establishing) an independent inquiry that targets police work," she said. "I don't think we should just sort of make concessions in order to silence the violent protesters."