Hong Kong's Political Stability and Electoral Dynamics Post-Disaster: Assessing the Long-Term Implications of Low Voter Turnout on Governance and Economic Confidence

Hong Kong's political landscape has undergone profound shifts since the 2019 pro-democracy protests and the subsequent implementation of the National Security Law (NSL) in 2020. These changes have reshaped electoral dynamics, with voter turnout plummeting to historic lows in recent elections. The 2021 Legislative Council (LegCo) election recorded a turnout of 30.2%, a stark decline from the 71.2% seen in the 2019 district council elections. By 2023, the District Council elections saw an even lower turnout of 27.59% according to election data. This sustained disengagement reflects a broader erosion of trust in the political system, driven by Beijing-imposed electoral reforms that prioritize "patriotism" over pluralism.

Governance Effectiveness and Legitimacy

The low voter turnout underscores a critical challenge to governance legitimacy. The 2021 electoral reforms, which restricted candidates to those deemed "patriotic" by Beijing, effectively eliminated meaningful political competition. As a result, pan-democratic voters-historically comprising 60% of the electorate-boycotted elections, perceiving them as devoid of genuine representation. Despite government efforts to boost participation-such as offering "thank you leave" for workers and organizing public events-public apathy persists. Analysts argue that this trend weakens the perceived legitimacy of the John Lee administration, particularly when compared to Macau's 2025 Legislative Election where turnout reached 53.35%.

The governance structure has also shifted toward a Beijing-dominated system, with judicial independence and political freedoms eroded. Academic studies highlight that the NSL has reshaped Hong Kong's political dynamics, prioritizing stability over democratic institutions. This centralization risks long-term governance effectiveness, as public trust in policy-making processes diminishes. The 2025 Legislative Council election, held amid the aftermath of a deadly fire that claimed 159 lives, further exemplifies the disconnect between governance and public sentiment. Campaigning was subdued, and residents expressed disillusionment, calling for the election to be postponed.

Economic Confidence and Investor Sentiment

The political uncertainty has had measurable impacts on economic confidence. The postponement of elections and the NSL's implementation have introduced volatility into Hong Kong's financial markets. For instance, the Hang Seng Index has shown fluctuations in response to election-related announcements, reflecting investor anxiety over governance stability. While the government claims that the NSL has restored social stability and attracted foreign investment-citing a 10% increase in foreign-owned companies in 2024 according to government reports-academic analyses suggest a more nuanced picture. Foreign direct investment (FDI) dropped by 15% since 2020, and concerns over autonomy have led to a reevaluation of Hong Kong's risk profile by global investors according to analysis.

Investor sentiment has also shifted toward external markets. A 2025 survey revealed that 70% of Hong Kong investors view U.S. President Donald Trump as the candidate most likely to enhance the global economic climate, with 44% acknowledging the significant influence of U.S.-China relations on their local economy according to survey data. This has prompted a reallocation of capital, with plans to increase U.S. market investments from 19% to 24% by 2025 according to investment trends. However, 40% of respondents fear a deterioration in U.S.-China relations, highlighting the fragility of this shift according to survey findings.

Long-Term Implications and Policy Outcomes

The sustained low voter turnout and political instability pose risks to Hong Kong's long-term economic and institutional resilience. Academic studies warn that prolonged disillusionment could exacerbate emigration trends and deter foreign investment, undermining Hong Kong's status as a global financial hub. While the government emphasizes economic growth-reporting a 3.1% year-on-year GDP increase in Q1 2025-this masks underlying vulnerabilities, such as trade tensions with the U.S. and the erosion of institutional autonomy according to EU economic data.

Institutional reports, including the 2025 Freedom House assessment, downgraded Hong Kong's status to "Not Free", reflecting the systematic dismantling of democratic structures. This has implications for governance effectiveness, as trust in public institutions wanes. The challenge for policymakers lies in balancing stability with the need to restore public confidence-a task complicated by the current political framework.

Conclusion

Hong Kong's electoral dynamics post-2019 represent a critical juncture in its political and economic trajectory. The sustained low voter turnout signals a profound disconnect between governance and public trust, with long-term implications for institutional legitimacy and economic confidence. While the government has prioritized stability and FDI growth, the erosion of democratic norms and political participation risks undermining Hong Kong's global competitiveness. For investors, navigating this landscape requires a nuanced understanding of both political risks and the potential for policy shifts in an increasingly complex geopolitical environment.