Hong Kong unveils US$2.4b package for slowing economy

CNS

The Hong Kong government unveiled a HK$19.1 billion (US$2.4 billion) package on Thursday to support a slowing economy as escalating protests weigh heavily on the Asian financial center.

Financial Secretary Paul Chan announced the package at a news conference as anti-government protests roiled Hong Kong for the third month.

He said the government is expecting to lower its 2019 GDP growth forecast to 0-1 percent, from the original 2-3 percent.

The measures include subsidies for the underprivileged and business enterprises, as well as somewhat higher salary tax rebates.

The off-cycle support came ahead of the annual policy address in October and the budget, scheduled for early next year.

“It is prudent and reasonable to assume that the economic headwinds will continue to be very strong,” he said.

The government will also provide a 90 percent guarantee for approved loans to small and medium sized businesses, create more construction jobs, and hand HK$2.3 billion of subsidies to 900,000 school students.

Ten weeks of increasingly violent confrontations between police and demonstrators have plunged the international business hub into its worst crisis since 1997.

Tourists are canceling hotel bookings and retailers are forecasting a sharp drop in sales.

Hong Kong leader Carrie Lam last week warned the next downturn will hit the city’s economy like a “tsunami,” and said her administration will provide more “daring measures” in supporting growth.

“The world’s going into recession ... Hong Kong will not be able to ride that out without being affected,” she said.

Meanwhile, prominent businessmen in Hong Kong have said that the recent escalating violence has affected Hong Kong’s economy and people’s livelihood, appealing to different sectors of the society to work together to stop violence and chaos and find a way out for Hong Kong’s future.

Raymond Kwok, chairman of Sun Hung Kai Properties Limited, criticized the recent spate of violent acts for damaging Hong Kong’s economy and people’s lives.

He called on the demonstrators to stop violence and return to reason, and reiterated that only by carrying out communication and dialogues can people find a way out for Hong Kong.

“One country, two systems” is the cornerstone for Hong Kong’s success and the backbone of its prosperity, he said, adding that it should never be undermined by the escalating violence.

Henry Cheng, chairman of New World Development Company Limited, said it is worrisome that violence in Hong Kong has intensified in the past two months, adding that the continued confrontation or violence has not helped resolve the current impasse, but on the contrary has affected different sectors of the society and left unpredictable sequels.

He called on all sectors to support the police in strictly enforcing the law, and to jointly curb violence and chaos and restore social order.

Peter Lee, co-chairman of Henderson Land Development Company Limited, warned that the continued chaos had plunged Hong Kong’s economy into both internal and external troubles. If the economy collapses, it will take a long time to rebuild and recover.