With escalating protests in Hong Kong forcing the closure of its airport and the Chinese government expressing rising anger at the protesters and denouncing some of the violent demonstrations as “terrorism,” the situation seems to be turning from bad to worse.

Passengers had to bear the brunt of the ongoing agitation as all flights in and out of Hong Kong were cancelled on Monday after thousands of pro-democracy protesters flooded the airport to denounce police violence.

The impact could be gauged by the fact that at least 150 flights were cancelled at the world’s eighth busiest airport, which handles around 200,000 passengers a day.

The developments mark yet another dramatic escalation in a 10-week crisis that had already become the biggest challenge to Chinese rule of Hong Kong since the 1997 British handover.

The movement that began over opposition to a bill allowing extradition to mainland China has morphed into a broader bid to reverse a slide of democratic freedoms.

The turbulence had its impact on global stock markets too, which dropped on Monday. London, Frankfurt and Paris all slid into negative territory as news of the shutdown spread, having rallied at the open. Hong Kong’s main shares index closed lower just as news of the shutdown emerged.

The issue has also drawn international attention. While the British government has expressed concern about the latest violence and wants calm from all sides, US Senate Republican leader Mitch McConnell has warned China that any violent crackdown on protests in Hong Kong would be completely unacceptable.

“The people of Hong Kong are bravely standing up to the Chinese Communist Party as Beijing tries to encroach on their autonomy and freedom,” the senator has stated in a tweet. “Any violent crackdown would be completely unacceptable... The world is watching.”

US President Donald Trump, on his part, had described the Hong Kong protests as “riots” earlier this month and declared that it was a matter for China and Hong Kong to deal with, as the territory was part of China.

The city’s Beijing-appointed leader Carrie Lam is clearly in no mood to accede to the protesters’ demands, which include a full withdrawal of the now-suspended extradition bill, direct election of the city’s leader and an investigation into police violence.

On Saturday, she addressed students at Hong Kong army cadets camp and warned that the city was suffering from external worries and internal perils.

Sadly, with empty hotel rooms, struggling shops and even disruption at Disneyland, the months of protests have taken a major toll on the city’s economy, with no end in sight.

Lam has warned that the international financial hub is facing an economic crisis worse than either the 2003 SARS outbreak that paralysed Hong Kong or the 2008 financial crisis.

The situation this time is more severe, according to her, and the “economic recovery will take a very long time.”

Hotel occupancy rates are down “double-digit” percentages, as were visitor arrivals in July. Group tour bookings from the short-haul market have plunged up to 50 per cent.

It is not surprising that the city’s tourism industry says it feels under siege.

The retail sector has also been hit by the drop in arriving visitors hunting for bargains, shops often forced to shutter during the sometimes-daily protests.

In the absence of a definite formula to solve the issue, further clashes seem inevitable. The only best way out is for all parties to engage in constructive dialogue.