HONG KONG: The Hong Kong’s government pledged HK$4 bil (RM2.14 bil) on Dec 4 in new relief measures to help bolster an economy battered by months of protests that have eroded business confidence in the international financial hub.
The boost brings the government’s total stimulus to HK$25 bil since this summer to right an economy, which is reeling from sharp drops in tourism and retail sales.
The Chinese-ruled city has been convulsed by nearly six months of anti-Beijing protests that have sometimes turned violent.
It is now grappling with its first recession in a decade and deepening concern that international investors may be growing more skittish.
“During an economic downturn, supporting employment is the number one priority of the government,” Financial Secretary Paul Chan said as he announced the package.
He said the measures are mainly aimed at helping small and medium-sized businesses in order to safeguard jobs. The demonstrations were hurting investor confidence, he told reporters.
The protests were sparked by a controversial and since-withdrawn extradition bill and have swelled into broader calls for greater democratic freedoms.
Those taking part in the pro-democracy demonstrations accuse China of increasingly interfering in freedoms promised to the former British colony when it was returned to Chinese rule in 1997. China denies interfering in Hong Kong’s affairs.
Earlier on Dec 4, the International Monetary Fund urged the government to deliver “significantly” more fiscal stimulus to address the downturn and longer-term structural issues such as insufficient housing and income inequality.
Business activity in Hong Kong contracted at the fastest pace in 21 years in November, dragged down by the protests and softening global demand, an IHS Markit survey showed.
Hong Kong is a top shopping destination for Chinese tourists. But the unrest has scared off visitors and hit spending. This week the city recorded its largest-ever retail collapse, with sales dropping 24.3% to HK$30.1 bil in October.
Asia’s largest distributor of luxury brands, the Blubell group, has appealed to Hong Kong landlords to scrap the base rent in shopping malls, saying a slump in tourist spending will push even more retailers out of business. – Reuters
