This Feb 25, 2018 general view shows ships sailing in the waters off Hong Kong and the city's skyline. Hong Kong was ranked the fourth globally on the ease of doing business in a World Bank annual report, according to the HKSAR government. (ANTHONY WALLACE / AFP)

Hong Kong had gone through numerous economic recessions. Each time, the government and businesses took them in their stride in the belief that economic cycles come and go when market forces are allowed to achieve equilibrium.

The factors that have dented the local economy this time are easily identifiable. The consensus is that Hong Kong has been hit by the “double whammy” of the protracted trade spat between its two largest markets — the United States and the Chinese mainland ­— plus the anti-government protests that have been raging for more than four months without any sign of abating.

The causes of each recession are different from one another, but the automatic adjustment process is normally the same.

When the Hong Kong dollar’s exchange rate was allowed to float against the US dollar and other major currencies, the economic adjustment process, invariably, went through the foreign exchange market. The resulting currency depreciation would help the city regain its competitiveness against its regional rivals, contributing to faster economic growth.

The linked exchange rate mechanism, however, has made it necessary for the economy to adjust through asset prices and wages. To be sure, lower property prices and falling wages can help boost competitiveness in exports of goods and, more importantly, services. But, the consequences of such an adjustment can be too brutal for people to bear.

The HKSAR government has limited tools to fight market forces that are shaped by external factors and are beyond its control. Nor is it in a position to produce quick results by addressing the deep-rooted social and economic issues that have been widely blamed for the ongoing unrest.

What the government can do, and is doing, is to use fiscal measures to mitigate market forces that are hitting various sectors of the economy, particularly tourism, retail and transportation. The administration has further proposed measures aimed at increasing housing supply, as well as a slew of subsidies to help needy families and the elderly poor weather the storm.