Keep falling! The burden of violence is pushing Hong Kong's economy to the bottom

Xinhua News Agency, Hong Kong, October 11 Title: Continued decline! The burden of violence is pushing Hong Kong's economy to the bottom

Xinhua News Agency reporter Zhang Huan

"In the first week of October, the number of visitors to Hong Kong decreased by 50% year-on-year, and the employment situation in the tourism industry is worrying." The Secretary for Commerce and Economic Development of the Hong Kong SAR Government, Mr Edward Yau, said on the 10th.

In the first half of this year, the number of tourists visiting Hong Kong was still in a state of positive growth at a high level. With the escalation of illegal and violent activities since June, the number of passengers has turned from positive to negative and the decline has continued to expand. Today, the pressure of violence has spread from the first tourism industry to more areas, and is pushing Hong Kong's economy to the bottom.

"The economic figures for the third quarter of this year are definitely poor, and all walks of life will enter a harsh winter." Carrie Lam, chief executive of the Hong Kong Special Administrative Region, said that in the future, the SAR government will do its best to support enterprises and protect employment, but it requires all sectors of society to work together to stop violence and control chaos.

Since the second half of last year, the slowdown in world economic growth and peripheral economic and trade frictions have weakened Hong Kong's external demand. According to statistics from the Hong Kong Trade Development Council, Hong Kong's exports fell by 10 consecutive months to -6.3% as of August, and the year-on-year growth rate of exports in 2019 is expected to fall to -4%.

At a time when external momentum is declining, Hong Kong's economy is still encountering greater challenges. The four-month period of illegal violence has not only hit the economy and people's livelihood hard, but also increasingly tarnished Hong Kong's image.

According to the SAR government, Hong Kong's retail sales fell for six consecutive months, plunging 23% year-on-year in August, the largest monthly decline. The year-on-year decline in the number of visitors to Hong Kong has been increasing since July, and the number of countries and regions that have issued travel tips to Hong Kong has increased to 40.

Au Si Hung, an economic adviser to the SAR Government, said that the negative growth of consumption data, in addition to reflecting its own problems, will also lead to a further decline in investment on the basis of a significant decline in the first half of the year, so that the internal growth momentum of the Hong Kong economy will weaken again.

In August, the "Current Trend Index of Hong Kong SME Business Income", which estimates corporate investment intentions, has plummeted to 32.1, a record low since the june 2011 survey. At the same time, due to the economic recession and reduced purchasing power, private residential property prices in Hong Kong fell for three consecutive months in August, and the vacancy rate of office buildings in traditional business districts also hit a five-year high in August, due to the suspension of investment expansion plans by enterprises.

"When exports, retail and investment are weak, the overall economic figures will be difficult to pin high hopes on. If the third quarter economic growth rate is negative again, Hong Kong's economy will fall into a technical recession. The Financial Secretary of the SAR Government, Paul Chan Mo-po, said that although the data has not yet been released, the general situation of the market has been "well known".

In fact, not only was the economy overshadowed in the third quarter, but after months of destruction, Hong Kong's economic outlook was also bleak. According to a research report released by the University of Hong Kong a few days ago, Hong Kong's economy will inevitably have negative growth in the second half of the year, with zero growth at most in the whole year. DBS Bank Hong Kong also expects Hong Kong's economy to grow at zero for the full year. These forecasts are all at a lower limit of 0%-1%, which is the range of the SAR government's full-year economic growth forecast after the August cut.

Needless to say, an "economic typhoon" that has blown directly on Hong Kong has struck, and the escalating wind has not only swept various industries into a harsh winter, but also begun to disturb the long-stable Hong Kong job market.

At present, the overall unemployment rate in Hong Kong has risen by 0.1 percentage points to 2.9%, of which the combined unemployment rate of the hard-hit retail, accommodation and catering industries has risen significantly to 4.6%. The findings of the City University of Hong Kong further show that public confidence in employment in the fourth quarter has fallen sharply, believing that employment conditions are likely to continue to deteriorate.

"The severity of Hong Kong's economy has surpassed previous crisis periods such as SARS." Carrie Lam stressed that the economy will not only be affected for a long time, but also go through a long process of recovery. In the face of this situation, the SAR government has the responsibility to maintain employment and support enterprises.

Since mid-August, the HKSAR Government has been implementing a series of measures to boost the economy, with a scale of HK$19.1 billion, including exemptions from government fees, rent reductions, reductions in operating expenses, assistance to enterprises to solve capital turnover difficulties and find business opportunities, relief for the benefit of the people, tax relief, etc.

Chen Maobo said that although the economic downturn affects government tax revenue, the government will not cut expenditure, and will use the fiscal reserves accumulated over the years to consider the introduction of counter-cyclical measures in a timely manner to stimulate the economy and alleviate people's difficulties.

At the same time, the upcoming POLICY Address of the HKSAR Government in October will also take bolder measures to strengthen the momentum of economic growth, pay attention to deep-seated issues of people's livelihood, and enhance Hong Kong's international competitiveness. For example, it will increase the supply of land, promote the development of industries in the direction of diversification and high value-added, and promote Hong Kong's traditional advantages, the spirit of the rule of law and potential areas to the international community.

Carrie Lam pointed out that the SAR government will continue to work hard, but for Hong Kong's economy to get out of the trough and society to recover from the tears, the foundation is the same: it must stop widespread violence so that Hong Kong will no longer be harmed.