In the first half of this year, the number of visitors to Hong Kong remained at a high level of positive growth. With the escalation of illegal and violent activities since June, the growth rate of passenger arrivals has changed from positive to negative and the decline has been expanding. Today, the pressure of violence has spread from the tourism industry to more areas, pushing Hong Kongs economy to the bottom.
The economic figures in the third quarter of this year must be very poor, and all walks of life will enter a severe winter. The Chief Executive of the HKSAR, Lin Zhengyue-e, said that in the future, the HKSAR government will do its best to support enterprises and protect employment, but it needs the joint efforts of all sectors of society to stop the riots.
Since the second half of last year, the slowdown of world economic growth and external economic and trade frictions have weakened Hong Kongs external demand. According to statistics from the Hong Kong Trade Development Board, Hong Kongs exports have fallen for 10 months to - 6.3% in August, and the growth rate of exports is expected to fall to - 4% in 2019.
At a time of diminished external momentum, Hong Kongs economy is still facing greater challenges. The illegal and violent activities that lasted for four months not only severely hit the economy and peoples livelihood, but also increasingly damaged Hong Kongs image.
Hong Kongs retail sales fell six months in a row, with a sharp 23% drop in August compared with the same period last year, the biggest one month drop recorded by the SAR government. The year-on-year drop in the number of visitors to Hong Kong has been increasing steadily since July, bringing the number of countries and regions that have issued travel tips to Hong Kong to 40.
Ou Xixixiong, an economic adviser to the SAR Government, said that negative growth in consumption data, in addition to reflecting its own problems, would also lead to a further decline in investment on the basis of a significant drop in the first half of the year, thereby weakening the internal growth momentum of Hong Kongs economy once again.
In August, the Hong Kong SME Business Income Current Trend Index, which estimates the investment intention of enterprises, has dropped sharply to 32.1, a record low since the survey was conducted in June 2011. Meanwhile, owing to the economic recession and lower purchasing power, Hong Kongs private residential property prices fell for three consecutive months in August. The vacancy rate of office buildings in traditional business circles also hit a five-year high in August, owing to the suspension of investment expansion plans by enterprises.
When exports, retail sales and even investment are weak, the overall economic figures will be hard to pin on. If the third quarter of the year-on-year economic growth again negative, Hong Kongs economy will fall into a technical recession. Chen maobo, financial secretary of the SAR government, said that although the data had not been released, the market had a good idea of the general situation.
There is no doubt that an economic typhoon has hit Hong Kong. The ever-increasing wind force not only brings various industries into the severe winter, but also begins to disturb the stable employment market of Hong Kong for many years.
At present, the overall unemployment rate in Hong Kong has risen by 0.1% to 2.9%, and the total unemployment rate in the seriously damaged retail, accommodation and catering industries has risen significantly to 4.6%. The findings of the City University of Hong Kong further show that the publics confidence in employment in the fourth quarter has dropped sharply and that the employment situation may continue to deteriorate.
The severity of Hong Kongs economy has surpassed the previous SARS and other crisis periods. Lin Zhengyue-e stressed that not only will the economy be affected for a long time, but recovery will also go through a long process. Faced with this situation, the SAR government has the responsibility to ensure employment and support enterprises.
Since mid-August, the SAR Government has been implementing a series of measures to boost the economy, with a scale of HK$19.1 billion, including exemption of government fees, rent relief, reduction of operating expenses of enterprises, helping enterprises to solve the difficulties of capital turnover and find business opportunities, helping the people to rescue, tax relief and so on.
Chen maobo said that despite the impact of the economic downturn on government tax revenue, the government will not cut spending, and will take advantage of the accumulated fiscal reserves for many years to consider introducing counter cyclical measures to stimulate the economy and relieve the people.
At the same time, the policy address to be issued in October will also take bolder measures to strengthen the momentum of economic growth, focus on deep-seated livelihood issues and enhance Hong Kongs international competitiveness. For example, we should increase land supply, promote diversification and high value-added industries, and promote Hong Kongs traditional advantages, spirit of the rule of law and potential areas to the international community.
Lin Zhengyue-e pointed out that the SAR government will continue to work hard, but if Hong Kongs economy is to get out of the trough and society is to recover from the tear, the basis is the same: extensive violence must be stopped so that Hong Kong is no longer harmed.
Source: Xinhua responsible editor: Yang Bin_NF4368