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A stormy Q1

In the blink of an eye, Q1 of 2022 will end soon. It has been a stormy quarter for Hong Kong. Amid the fifth wave of COVID outbreak, the number of daily confirmed cases has once peaked at a level of over 70 000, with the death number accumulated to some 7 000. The epidemic has also dealt a severe blow to the economy, pushing up the unemployment rate by 0.6 percentage point to 4.5%, and likely will hike further. Recently the Hang Seng Index has been highly volatile and once dropped by about 10% within two days. The Hang Seng TECH index has even fallen by more than 30% within two weeks since end February. These figures have reflected the tremendous pressure facing the Hong Kong society, people’s livelihoods and the economy, which is induced by both internal and external factors such as the severe epidemic situation, the intensifying international geopolitical situation, the mounting inflation pressure, as well as the China-US relation.

In fact, figures of different economic activities have shown how huge the current pressure is. For instance, our total retail sales value will see a decrease again in February, ending the 12-consecutive-month increasing trend. The growing pace of our export will also slow down. As a result, our economy will inevitably record a recession in Q1, reversing the previous four-consecutive-quarter recovery.

One of the questions I have been frequently asked in recent local or overseas online seminars or media interviews is that whether I am still confident in Hong Kong’s economic prospect. My answer is clear and definite. I am having absolute and resolute confidence in Hong Kong’s economic prospect. By having a precise assessment on the overall development trend, and acting decisively to capitalise the development and support of our Country, we will overcome any short term challenges and move forward.

Learning from Hong Kong’s development path over decades, even in face of challenges or difficulties, we should not lose our confidence despite short-term hiccups. Our Country has been developing steadily, and has been firmly supporting Hong Kong’s stability, prosperity and development under the full and faithful implementation of the “One Country, Two Systems” arrangement. Against this backdrop, Hong Kong has been working hard and developed into an international finance, trade and maritime centre, and contributed to our Country’s development at the same time. Today, these objective conditions and demands are further consolidated, providing the most solid direction for Hong Kong’s future development.

Even our short term development may have been disrupted by the epidemic, it will eventually come to an end one day. With the improvement of the electoral system and the implementation of the “patriots administering Hong Kong” principle, Hong Kong will surely achieve a more prosperous and all-round development, gradually bringing more tangible and substantive changes in people’s livelihood as well as social and economic developments. By having a good understanding of the overall situation and social sentiment, making the right decisions and executing with determination, we will be able to get rid of unnecessary disturbance and enhance governance efficiency, deliver concrete measures for social and economic improvement and earn people’s recognition and support.

Upholding the principle of “precisely grasping the overall situation and making progress steadily” could strengthen our confidence and determination in handling short-term challenges, and help us in rightly position ourselves to ride on the development trend proactively. This is what we have summarised from Hong Kong’s past success.

In face of the current severe local epidemic situation, we should adopt the same holistic approach and formulating our work carefully. On one hand, some people may consider that the anti-virus work could be slightly relaxed as more than one million citizens have already been infected by the Omicron variant and many of them have even recovered, and it seems that the peak of the epidemic is over. Yet on the other hand, other millions of citizens are still doing very hard to protect themselves from infection. More importantly, more than 200 000 elderlies in the community aged over 70 have not yet received the first jab of vaccination. This poses a big challenge in our anti-epidemic work.

Of course, we should not overlook the fact that recently some other places have gradually relaxed their anti-epidemic measures as well as the immigration and quarantine requirements on arrival travelers. As an international city, we have to tackle this very concrete and crucial question on how we should resume connections with other places gradually and orderly, while at the same time upholding the principle of “prioritizing people’s lives and health” and “dynamic zero infection” to pursue resumption of normal travel with the Mainland. In addition, the intensifying geopolitical situation, mounting global inflation pressure as well as the hiking interest rate have troubled the investment sentiment of the global market, exacerbating the external challenges and pressure that we are facing.

We should aim for a holistic victory in curbing the epidemic, that is to suppress the epidemic and support the economy at the same time, as well as to stabilise the internal situation having taking into account external developments. In short, while we have to achieve the goal of “prioritising people’s lives and health” and adopt the strategy of “dynamic zero infection” to protect our people and support the economy, we should also maintain connections with other places through practical means. It is important for us to be patient and vigilant and apply the “bottom-line mind set” in fighting against the epidemic. With a practical, sustainable and dynamic plan, as well as comprehensive and adequate preparation, we will surely win this battle against the epidemic and progress towards full economic recovery!

March 27, 2022