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The social incidents have continued for four months and quite a number of industries are paying a heavy cost silently. You would realise how worse the situation is by taking a look at the restaurants and shops, or talk to friends from different sectors.

The Government will announce the advance estimates on Gross Domestic Product (GDP) for the third quarter on the coming Thursday. Following the quarter-on-quarter negative growth recorded in the second quarter, the economy continued to contract in the third quarter, which means Hong Kong’s economy is technically heading into recession. The extent of contraction has magnified. Worse still, the economy remains in the doldrums. It becomes extremely difficult to reach the 0 to 1% real GDP growth forecast for the year and we cannot rule out the possibility of negative economic growth for the full year.

The blow to Hong Kong economy is multi-faceted.

In September, the value of Hong Kong's total exports of goods decreased by 7.3% over a year. The drop in the third quarter was 6.4%, which was nearly 2% more than the drop in the second quarter. The decrease in export volume in the third quarter is expected to be over 7%, which is the largest quarterly fall in the past decade.

For the tourism industry, visitor arrivals recorded a single digit fall in July but the drop steepened to almost 37% in August and September. The situation in October gets even worse as a sharp fall of 50% was recorded in the first half of the month. Average hotel room occupancy rate in August fell by 28 percent points to 66%. Although the latest data for September and October is yet available, the tourism sector said that the situation is now the worst since the SAR outbreak in 2003. The room occupancy rate for hotels located in areas seriously affected by demonstrations was astonishingly low.

For the retail sector, some retailers expressed that in recent months their shops were forced to close earlier or even for the whole day. Staff has to worry about their personal safety and travel arrangements. The decrease in total retail sales volume enlarged from 13.1% in July to 25.3% in August. This registered the steepest year-on-year decline for a single month on record.

The Hong Kong SME Leading Business Index indicates a significant drop in SMEs' confidence in the business environment. The Government will try our very best to support the economy and safeguard employment.

Last week, I announced a new round of measures to support enterprises and safeguard jobs. This is the third round of measures since mid- August costing about $2 billion in total with a specific focus on sectors being directly hard-hit. The measures included, (1) providing fuel subsidy for the transport trade for six months or a one-off fuel subsidy. This will cost about $1,365 million and benefit around 61 000 taxi/red minibus drivers, 180 public transport operators, and owners of 130 000 commercial vehicles and vessels; (2) providing a one-off survey fee subsidy for local commercial marine vessels. This will cost about $16.5 million and benefit around 6 300 local commercial marine vessels, and (3) extending the coverage of the rental concession to public car parks, supermarkets, retail stores and light refreshment kiosks, etc. leased by the Government Property Agency.

For the hard-hit tourism sector, we hope to safeguard the jobs of over 6 000 tour guides and 17 000 more tour managers through our support to the operation of travel agencies. The Hong Kong Tourism Board and the Travel Industry Council of Hong Kong will launch a 4-month cash incentive scheme under which travel agents will get cash incentive for each inbound overnight visitor and every agent can receive up to $60,000.

We will continue to closely monitor developments on both the external and local fronts and formulate further relief measures. Yet, these supporting measures could only slightly alleviate pressure of the trade and citizens. After all, to fundamentally address the issue, we need concerted effort of the community to stop the violence, stop damaging transport infrastructure, targeted shops, banks or organisations; stop attacking people with different views, and stop any attempt for "mutual destruction". We need to restore social order, resume normal living of citizens and businesses operation, and create more rooms for rational dialogue. Our society and economy need breathing and healing spaces and a chance to start afresh. For the benefit of Hong Kong, our home, please set aside disputes, return to rational dialogue and find a way out. Only by doing so, we can study in detail and response to various demands and contradictions.

27 October 2019

   

 
 
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