HONG KONG (Reuters) - Hong Kong pro-democracy demonstrators risked a backlash from commuters and retailers on Tuesday as lingering protests caused traffic chaos and sales slump in the global financial hub, with preliminary talks with the government suggesting no quick solution.
Hundreds of protesters remained camped out on the main road leading into Hong Kong's main government and business districts, the last holdouts after more than a week of rallies that attracted tens of thousands on to the streets at their peak.
Student-led protesters began lifting the blockades of government offices and retail areas on Monday as preliminary, behind-the-scenes talks meant to lead ultimately to formal negotiations showed modest signs of progress.
After preparatory discussions with student representatives on Monday night, Mr Lau Kong Wah, the government's Undersecretary of Constitutional and Mainland Affairs, said both sides had agreed on general principles for the formal talks. "I think today's meeting was successful and progress has been made," he told reporters.
Protest leaders have promised to carry on with the Occupy demonstrations until their demands are met. "It has to end when, and only when, the government promises something, otherwise it is impossible to persuade the people to quit," said Hong Kong Federation of Students leader Alex Chow.
With trunk roads still occupied by protesters, alternative routes into key areas of the city have quickly become clogged.
Traffic jams on Hong Kong Island and across Victoria Harbour in Kowloon stretched back miles in some places. Passengers trying to get on to underground trains were packed tight as they queued up two levels and spilled out on to the street near the main protest site in the Admiralty district.
The retail authorities have warned that a quick solution is needed before the former British colony suffers a fall in October sales, a key shopping month that encompasses the Golden Week holiday period, for the first time since 2003.
The Hong Kong Retail Management Association said late on Monday sales at chain stores had dropped between 30 per cent and 45 per cent from Oct 1 to Oct 5 in Admiralty and Central, as well as in the nearby shopping district of Causeway Bay.
Sales fell just as sharply in Kowloon's working class district of Mong Kok, scene of some of the most violent clashes between protesters and the police and pro-Beijing groups.
Many Hong Kong businesses were already struggling before the latest demonstrations, a monthly survey by HSBC and Markit Group showed on Tuesday. New business fell for the fifth-straight month in September, while companies reduced staffing levels for the sixth consecutive month. The rate of job shedding was the quickest in four months.
The protests have ebbed and flowed over the past week, with people leaving the streets overnight to return later. The police have taken a hands-off approach since Sept 28, when they fired tear gas and pepper spray at protesters.
The protests have disrupted businesses and helped wipe close to US$50 billion (S$64 billion) off the value of shares on the Hong Kong stock exchange. The World Bank has said the protests were hurting Hong Kong's economy, although the impact on China was limited so far.
Over the past week, the protesters have demanded that the city's Beijing-appointed leader Leung Chun Ying quit and that China allow Hong Kong people the right to vote for a leader of their choice in 2017 elections. China wants to screen the candidates first.
The Occupy Central protests, an idea conceived over a year ago referring to the Central business district, have presented Beijing with one of its biggest political challenges since it crushed pro-democracy demonstrations in and around Tiananmen Square in the Chinese capital in 1989.
Beijing fears that calls for democracy in Hong Kong could spread to the mainland, with China already facing separatist unrest in far-flung Tibet and Xinjiang. The Communist Party leadership has dismissed the Hong Kong protests as illegal but has left Mr Leung's government to find a solution.