Economic activity hits 22-month low

Hong Kong's economic activity fell to 42.9 in February, the lowest in 22 months, data from IHS Markit's survey showed.

The Purchasing Managers' Index in Hong Kong dropped from 48.9 in January to 42.9 last month, as production and order numbers slumped for two consecutive months. The fall is accelerating with the fifth wave of the pandemic worsening. The analyst estimated that the unemployment rate might climb to 4.9 percent this year due to the conservative employers, while Hong Kong's economy will step into recession with an expectation that PMI in the city will remain below 50 for several months.

In China, the PMI for Caixin/Markit services also dropped to 50.2 in February from 51.4 in January, marking the lowest level since August, and only a touch above the 50-point mark that separates growth from contraction as more Chinese cities are battling local Covid-19 cases in recent weeks.

Meanwhile, China will become a high-income country by 2025 at the latest, said Justin Yifu Lin, a former chief economist at the World Bank.