Protests worsen HK's economic woes

Retail and consumer confidence have been hit by the protests against the aborted fugitive bill, says David Wong Yau-kar, permanent honorary president of the Chinese Manufacturers' Association of Hong Kong.

Charlotte Luo

Tuesday, July 09, 2019

Retail and consumer confidence have been hit by the protests against the aborted fugitive bill, says David Wong Yau-kar, permanent honorary president of the Chinese Manufacturers' Association of Hong Kong.

At an Asian business forum yesterday, Wong said Hong Kong's economy has been slowing down and political factors will further affect it.

It would take a hit from the protests triggered by the anti-fugitive campaign.

Wong, a Hong Kong delegate to the National People's Congress and chairman of the Mandatory Provident Fund Schemes Authority, said the government had already suspended the bill, and he did not see the purpose of further protests.

The issue of amending the Fugitive Offenders Ordinance at this level had been solved.

Hong Kong eventually needed to solve the issues of livelihood, economic development and housing, he added.

Wong also said the Greater Bay area will bring more opportunity to Hong Kong, providing a bigger platform to solve livelihood, social, and economic problems.

There are fears that further escalation could drive away tourists and reduce local shoppers' desire to spend.

Statistics released by the City University of Hong Kong yesterday showed the SAR consumer confidence index dropped 10 percent year-on-year for the second quarter to the lowest level for five years, with economic uncertainty and political unrest to blame.

"These results are largely due to the decline in residents' confidence in economic development and home purchases, but this is also associated with instability in Hong Kong's political environment in the past month," a spokesman for the university said.

The overall Hong Kong Consumer Confidence Index was 77.7, down 10.5 percent year on year and 4.1 percent quarter on quarter - the lowest level over the past five years.

All sub-indices were lower than 100 in a 0-200 scale, with 0 representing "no confidence" and 200 representing "complete confidence," showing that Hong Kong consumers lack confidence in six economic areas - economic development, property purchases, commodity prices and stock investments, employment and the standard of living.

The sub-index of Hong Kong people toward economic development was 79.2, down 23.5 percent year on year and 13.4 quarter on quarter, indicating that consumer confidence in economic development decreased a lot from the previous quarter.

The sub-index of 51.1 in property purchases shows that it remains the area in which Hong Kong people have the least confidence.

The sub-index for commodity prices is 67.6 and sub-index for stock investments 77.1.

The sub-index result of Hong Kong people toward employment was 91.9 while the sub-index for the standard of living was 99.1.

The tourism sector was also affected by the political environment in the past month.

The Travel Industry Council of Hong Kong estimated that bookings for outbound tours departing during the summer holiday will drop 10 percent year-on-year due to the negative mood brought about by the trade war and protests.

Charles Ng Kwong-wai, chairman of the Hong Kong Inbound Tour Operators Association, said about 20 percent of mainland tour groups cancelled their trips to Hong Kong last month.

The number of people in groups that managed to arrive in Hong Kong dropped.

Ng said previously each tour group would have about 30 people every day. But last month there were only slightly more than 10 people in each tour group.

Speaking on a radio show yesterday, Steve Huen Kwok-chuen, executive director and co-founder of Hong Kong-listed travel agency EGL Tours, said the number of customers for outbound tour groups for summer, including July and August, had dropped 5 percent. Some fees for tour groups had to have 5 to 10 percent discounts.

At the same Asian business forum, Financial Secretary Paul Chan Mo-po said he hoped that different sides in society could end grudges and work together.

Chan said in the new international situation, Hong Kong has many opportunities, but at the same time it faces many challenges and external difficulties.

"I hope that all sectors of the community can let go of their grudges and work together to overcome the difficulties that lie ahead. The SAR government will certainly learn lessons, strengthen communications with all sectors of the community, listen to opinions in a modest and open manner, and make the government's policy implementation be closer to the people," he said.

"We will concentrate on doing a good job in economic development, in social work and people's livelihoods, so that Hong Kong will continue to move forward steadily," he added.

American business and financial services company Moody's forecast Hong Kong's economic growth would slow to 2.3 percent this year, compared to 3 percent last year. The Hang Seng Index shed 1.54 percent to 28,331 yesterday.

Meanwhile, the MTR Corp said the 31,000 passengers taking Express Rail on Sunday was 50 percent less than the average patronage on weekends.

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