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Financial chief says Hong Kong economy may contract in 2019 amid unrest

(Xinhua)    09:24, October 28, 2019

HONG KONG, Oct. 27 -- Hong Kong may register a negative growth this year as the social turmoil has plagued the economy for more than four months, Paul Chan, financial secretary of China's Hong Kong Special Administrative Region (HKSAR) government, posted on his blog on Sunday.

As many industries have been "extremely burdened" with the continued social unrest, it is "impossible to rule out the possibility" that the economy will shrink this year, Chan wrote in the blog post.

"It seems that it is extremely difficult to achieve the forecast of 0 to 1 percent of the annual economic growth," he said.

The government will announce the Advance Estimate of the third quarter economic growth on Thursday, he said, adding that the economy continued to contract in the third quarter and significantly expanded its negative growth rate, signaling a "technical recession."

COMPREHENSIVE BLOW TO ECONOMY

"The blow to our economy is comprehensive," Chan said.

The value of Hong Kong's total exports dropped by 7.3 percent year-on-year in September, the Census and Statistics Department of the HKSAR government said Thursday.

The value of Hong Kong's exports fell by 6.4 percent in the third quarter, and the volume of exports is projected to see the greatest single-quarter decline in the past decade, down over 7 percent, Chan said.

The decline of tourist arrivals has been sharper in August and September, with a collective reduction of 37 percent, and even worse, the tourist arrivals fall more quickly in October, he said when briefing the damage to the tourism industry.

The average occupancy rate of hotel rooms in August fell by 28 percentage points year-on-year to 66 percent, and the industry reported that it took the worst hit in September and October since the 2003 SARS outbreak, he added.

With the retail sales sector also clouded by the months-long unrest, some shops were forced to suspend business for half a day or even all day while their staff were worried about personal safety and traffic arrangements.

Data showed that the retail sales volume in Hong Kong plunged 25.3 percent year-on-year in August, a significant deterioration from July's 13.1-percent contraction, marking the sharpest annual decline in retail sales since current records began.

MORE RELIEF MEASURES

The HKSAR government on Tuesday announced a new round of measures costing about 2 billion HK dollars (about 255 million U.S. dollars) to assist the sectors hard-hit by the economic downturn, including retail, catering, transport and tourism.

The government will provide fuel subsidy for the transport trade for six months or a one-off fuel subsidy, benefiting around 61,000 taxi drivers or drivers of minibuses on non-scheduled services, 180 public transport operators, and owners of 130,000 commercial vehicles and vessels.

A one-off survey fee subsidy for local commercial marine vessels will also be provided, benefiting around 6,300 local commercial marine vessels.

Furthermore, a reduction of rental for fee-paying public car parks, catering establishments, retail stores and other premises leased by the HKSAR government will be offered.

"The first two rounds (of measures) have been welcomed by the community and the sectors related," Chan said when announcing the latest wave of relief measures.

Chan said in his blog post that the HKSAR government will unveil a cash incentive scheme to support the operation of travel agencies, so as to boost the battered tourism industry that involves more than 6,000 tour guides.

The HKSAR government will continue to closely monitor the political and economic situation in Hong Kong and study additional relief measures, he said, adding that Hong Kong people must work together to stop the violence and restore order.

(For the latest China news, Please follow People's Daily on Twitter and Facebook)(Web editor: Wen Ying, Bianji)

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