Hong Kong’s economy shrank 8.9% year on year in the first three months of 2020.
As Hong Kong marks a year since the anti-government movement began, we analyse how key players have fared. This is the sixth article in the series.
Like other money changers in Hong Kong, Wong saw demand for the greenback rise tenfold over the last week in May, with more customers bringing hundreds of thousands, even millions, of Hong Kong dollars to change. The same day, US Secretary of State Mike Pompeo announced that it no longer considered Hong Kong highly autonomous from mainland China.
That was despite Financial Secretary Paul Chan Mo-po’s repeated assurances that the Hong Kong dollar’s linked exchange rate with the US dollar would remain and that any US trade sanctions were unlikely to hurt the city. Tourism was struck when mainlanders, the largest group of visitors, stayed away as hardcore radicals targeted mainland-owned businesses as well as those regarded as pro-Beijing.
The city’s economy shrank 8.9 per cent year on year in the first three months of 2020. It was the steepest quarterly drop since records began in 1974, and worse than the previous record low of 8.3 per cent in the July-September quarter of 1998, during the Asian financial crisis. The pandemic inflicted far more serious damage than the months of protests, but Chong said once travel resumed and visitor arrival figures rebounded, the economy would improve.National security law – bane or boon?
Tipping point for security law? PolyU and Chinese University protests: sourceFrancis Fong Po-kiu, honorary president of the Hong Kong Information Technology Federation which represents IT employers, was worried that the new law would result in an exodus of capital and investment. “People shouldn’t be so fearful and paranoid,” he said. “For me, the security law is really a blessing for Hong Kong and will bring the beauty back to businesses.”
With the recent easing of social-distancing measures, patrons began returning, but when protesters took to the streets again, diners stayed away.“When they saw the protests, they decided not to come out,” he said.“I am worried the protests will turn more radical,” he said. “As a businessman, if it becomes chaotic again, there’s nothing I can do.”
Defeat for Hong Kong protesters? One year on, pulse and purpose changesHong Kong’s resilience tested again “It will take time to get back to where we were before the pandemic,” the chamber added. “For next year as a whole, growth will be straddling the plus-minus line.” She expected the gross domestic product to shrink by 4.1 per cent from last year, and grow 3.1 per cent year-on-year in 2021 purely because of the low base effect. The government has forecast a decline of anywhere between 4 and 7 per cent this year, despite its relief measures.
“Asia-Pacific countries will be the future economic drivers for the global economy. Hong Kong is reliant on the support and development of China. I am sure China will offer more preferential treatment to Hong Kong to boost its development.” A more immediate concern for others was whether Hong Kong would see some semblance of recovery as the Covid-19 pandemic eases.
Liberal Party lawmaker Felix Chung Kwok-pan, representing the textiles industry, said encouraging domestic demand was key for reviving the hardest-hit dining and tourism sectors.“People don't even dare to go out to dine when there are protests,” he said. “Only when this protest movement comes to an end can the Hong Kong economy find a way out.
Out of 180 members polled, 70 per cent said they had no plans of moving their capital, assets or business operations from Hong Kong.
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