Strife-torn Hong Kong has suffered a record slump in retail sales, data showed Wednesday, as the city reels from four months of increasingly violent pro-democracy protests.

The months-long protests were sparked by an attempt by Hong Kong's Beijing-backed government to pass a bill which would have allowed extradition to China
The months-long protests were sparked by an attempt by Hong Kong's Beijing-backed government to pass a bill which would have allowed extradition to China AFP / Lillian SUWANRUMPHA

The international finance hub is a major international tourist destination and especially popular with mainland Chinese shoppers hoping to snap up bargains in a city with no sales tax.

But this summer's protests, sparked by rising public anger towards Beijing's rule, has battered the economy which was already struggling with the US-China trade war fallout.

Hong Kong's protests, sparked by rising public anger towards Beijing's rule, have battered the economy
Hong Kong's protests, sparked by rising public anger towards Beijing's rule, have battered the economy AFP / Mohd RASFAN

New figures released Wednesday showed retail sales declined by a record 23 percent year on year in August, compounding a 11.5 percent slump the month before.

Thousands gathered inside a mall in the northern town of Sha Tin to sing protest songs and make origami cranes
Thousands gathered inside a mall in the northern town of Sha Tin to sing protest songs and make origami cranes AFP / ISAAC LAWRENCE

Both police and protesters have only escalated their violence since then so there is little chance September's figures will fair any better.

Tuesday witnessed the worst clashes of the summer as China celebrated 70 years of Communist Party rule with a massive military parade in Beijing.

The city's pro-Beijing leaders have shown little appetite or ability to meet protester demands, or to find a political solution
The city's pro-Beijing leaders have shown little appetite or ability to meet protester demands, or to find a political solution AFP / Philip FONG

The spiralling clashes underscored seething public anger against Beijing's rule and shifted the spotlight from China's carefully choreographed birthday party.

Usually the first week of October is a bumper time for retailers.

A tourist struggles to get past protesters and reach a security gate at the Hong Kong airport departure hall
A tourist struggles to get past protesters and reach a security gate at the Hong Kong airport departure hall AFP / Philip FONG

Huge numbers of Chinese mainland tourists visit during the so-called Golden Week holiday.

But tourist arrivals from the mainland have tumbled as Beijing takes a hardline with protesters and police fight near weekly battles against demonstrators.

On-year tourist arrivals fell 40 percent in the last month, led by a collapse in visitors from the mainland -- by far the largest group, with hotel occupancy rates down around half.

Luxury goods are thought to have been hit particularly hard.

Many of the clashes have taken place in the districts of Tsim Sha Tsui and Causeway Bay, both areas of the city that are packed with luxury malls and retailers.

Multiple shops in Causeway Bay told AFP last month their takings were down by as much as 30 percent over the summer.

The city's economy likely entered a technical recession in the third quarter, Financial Secretary Paul Chan said in September.

But the city's pro-Beijing leaders have shown little appetite or ability to meet protester demands, or to find a political solution.

China