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Let's spend more together to boost the economy

The global economy is facing headwinds, and concerns over rising interest rates and recession linger. Battered by the worsening external environment and the fifth wave of the local epidemic, Hong Kong's economy could not maintain the momentum of last year's rebound, and saw contraction once again in the first two quarters of this year, with GDP having dropped by 2.7% year-on-year in the first half of the year. Looking at the second quarter alone, out of the three driving forces of the economy, trade performance faced the greatest pressure; private consumption, while relatively stable, was weaker than expected, showing virtually no change from a year earlier. Vouchers under the first phase of the Consumption Voucher Scheme were disbursed in April just as the epidemic was receding, thus supporting an 11.7% increase in the value of retail sales in that month. It was the only month since February when retail sales recorded a rise, reflecting the positive effect of the support and stimuli provided by the easing epidemic and consumption vouchers.

At a time when the external economic outlook is unclear and the local economy is under pressure, the Government begins disbursing the second phase of consumption vouchers in batches to about 6.36 million eligible persons today, with a total amount of over $30 billion. This, together with discounts offered by stored value facility (SVF) operators, merchants and shopping malls, as well as the additional spending by consumers, will enhance the multiplier effect of the consumption vouchers, and bring about a certain degree of stimulus to the local economy that urgently needs support. I plan to use my voucher to enjoy tea and buy a few small gifts. To share the joy, I also bought cotton candies and popcorns which are children's favourites. Sharing them with the residents of a neighbourhood, we had a good chat and an enjoyable Sunday morning.

To share the joy of the disbursement of consumption vouchers today, I have bought cotton candies and popcorns to share with children and the residents of a neighbourhood.

About 6.21 million eligible persons received their first $2,000 voucher today. They include (1) pre-existing registrants who received vouchers under Phase I in April this year and meet the relevant eligibility criteria for Phase II, and (2) new eligible registrants who have come to live in Hong Kong through different admission schemes for talents, professionals and entrepreneurs, or to study in Hong Kong. They will be given consumption vouchers at a total value of $5,000 by instalments. Another about 150,000 new registrants who are Hong Kong permanent residents or new arrivals meeting the relevant eligibility criteria will be given consumption vouchers at a total value of $10,000 by instalments. Today they received their first $3000 voucher. This means that a consumption power of nearly $13 billion has been injected into the local market of retail, catering, etc.

For consumption vouchers under Phase II, the number of participating SVFs has increased from four to six. For people who have chosen to collect their vouchers via AlipayHK, BoC Pay, PayMe from HSBC, Tap & Go or WeChat Pay HK, the first voucher has been directly deposited into their specified SVF account.

For those who have chosen to collect their vouchers via Octopus, they may collect them by tapping the card through the Octopus app or in person at the Subsidy Collection Points of the Public Transport Fare Subsidy Scheme (commonly known as the "blue machines") at MTR stations, Light Rail Customer Service Centres, designated piers and public transport interchanges; as well as designated convenience stores, supermarkets or Octopus Service Points.

Relevant eligible registrants would receive SMS notifications or mobile app push notifications today which remind them that the first voucher has been disbursed. They should remember to check them. They may also make enquiries through the interactive voice response system of the hotline 18 5000.

To share the joy of the disbursement of consumption vouchers today, I have bought cotton candies and popcorns to share with children and the residents of a neighbourhood.

On the other hand, among registrants who have been notified that they did not meet the eligibility criteria, the Consumption Voucher Scheme Secretariat has received over 150,000 applications for review (excluding duplicated applications). These applications are mainly from people who have made statutory declarations on the grounds of "permanent departure from Hong Kong" for early withdrawal of their Mandatory Provident Fund (MPF) or benefits under occupational retirement schemes. Among them, review was successful for about 104,000 applications. The registrants concerned were handed vouchers today and have been notified by SMS.

The Secretariat is processing the remaining review cases in full swing, including considering the information provided by the applicants and requesting some applicants to submit further information. Where their reviews are successful, they will receive the first voucher as soon as on 16 August.

Since we rolled out the Consumption Voucher Scheme last year, consumers and merchants have become more willing to embrace electronic payment, and its scope of application has also been gradually expanding. By the end of June this year, the major SVF platforms have acquired about 7.1 million more consumer user accounts, and about 130,000 more merchant accounts in total. Even though the value of retail sales fell by 2.6% in the first half of this year, the value of online sales rose by 24%. It is fair to say that consumption vouchers have expedited the application of electronic payment and raised its popularity, and reinforced consumer-driven digital retail transactions. This will provide more opportunities for merchants and businesses, as they may explore new business models and markets.

The “four proposals” set out by President Xi in his important speech at the 1st July celebrations included “continuing to create strong impetus for growth”. For the economy to move towards high-quality development, digitalisation is an inevitable direction to follow, and is a source of new energy and momentum for development. Innovation and technology (I&T) are certainly the economy's engine to drive the development of new key industries; equally important is introducing technology and digitalisation to traditional industries and business operations, thereby helping industries to upgrade and transform themselves and find new areas for growth.

For businesses, digitalisation can help drive transformation, improve the quality and quantity of output, and stimulate innovation. The “Digital Economy Development Committee” which I chair is pressing ahead with work in this area in full speed, bringing together the knowledge of the best minds of the industry and academia, and making every effort to chart a blueprint for the development of the digital economy for Hong Kong. An exhibition and sharing session on digital applications and technology co-organised by various government bureaux and departments will be held this week, which will encourage them to follow the policy direction of promoting I&T development and make good use of I&T to optimise public services.

With the Government working together with highly efficient markets and all parties, Hong Kong's digital economic development will surely leap forward. Consumption vouchers, while delivering much joy and encouraging spending, are further promoting and deepening the development of electronic payment. Harnessing the power of the market, they help integrate the digital economy into our daily life, and would make transactions more convenient and efficient as well as bring a more diverse range of products for our choice.

August 7, 2022