Hong Kong’s economic front

This summer, the typhoons and precipitation that ushered in the Hong Kong region did not increase significantly compared to previous years. However, meteorological vocabulary such as “welcoming typhoon” and “windball” often appear in various communication scenarios.

“There is a strong wind in the periphery. Hong Kong has known in the past two months that social events have made the society very tight and different industries have been affected. Seeing these figures is like the economic hang of the ‘No. 3 typhoon. Now everyone may I don’t think the wind is strong, but the typhoon is blowing at us.” At a press conference held in August, the Financial Secretary of the Hong Kong Special Administrative Region of China (hereinafter referred to as the “SAR Government”) Chen Maobo described the current Hong Kong economy as such. situation.

According to local life practices, the Observatory will hang the “No. 3 typhoon” during the strong winds before the typhoon, and the “No. 8 typhoon” will be suspended. This means that you do not have to go to school or rework and enjoy the “Typhoon False.”

As a highly export-oriented economy, the economic situation in Hong Kong has not deteriorated to the No. 8 typhoon level, but the four main indicators used to measure its economic performance – export trade, retail, logistics and tourism or hotels – are observed. It can be seen that there have been successive warnings of “full line of red”, the market has been significantly weakened, and the pressure on all walks of life has been jeopardized, on the verge of economic “technical recession”. As Chen Maobo said, “A relatively stable life in the past few years is the result of the efforts of many generations (Hong Kong people)” “The extent of the situation is absolutely not dare to look down… the chance of deterioration is very high.”

For the more than 7 million residents of Hong Kong who have experienced economic storms many times, the rapid deterioration of the economic fundamentals in the short term will bring pressure to the job market, which may break the cycle of “high employment, high consumption and high housing prices”. Or still not the most worrying thing. As an international financial business center, shipping center and popular tourist destination, Hong Kong has polished a number of “golden signboards” one by one in nearly a hundred years. Hong Kong people often say “Hong Kong” with confidence. It also means a series of excellent “quality” (Hong Kong idioms) guarantees such as international norms, efficiency guarantees, good rule of law and stability.

However, as the social order was delayed and could not be restored relatively smoothly, some of the formerly eager mainland tourists had no choice but to temporarily change the destination of their first outbound travel. Some of the meetings originally held in Hong Kong were cancelled or changed to be held in Shenzhen. Some original The business agreed in Hong Kong has been postponed… More and more foreign talents and investors are beginning to worry about the social environment and business environment in Hong Kong.

“So big things happen in Hong Kong and last for so long. The impact on our market, on all Hong Kong people, and on our economy is very long-term; therefore, I hope that we can all be self-sufficient.” On August 14, Li Xiaojia, Chief Executive Officer of the Hong Kong Stock Exchange, reminded him of attending the HKEx Interim Results Conference in Hong Kong.

Compared with the previous “SARS” and “financial tsunami” periods, the downside may be a more severe economic situation (the Chief Executive of the SAR Government, Lin Zhengyue’s proverb), which means that Hong Kong’s economic recovery will go through a short period of time. In order to stabilize the lives of the people, the SAR Government has temporarily introduced a series of measures aimed at “stabilizing confidence, ensuring employment, benefiting consumption and supporting the economy” to build an economic “breakwater”. More overall measures are also expected in October. Introduced. It is a prerequisite to revitalize the Hong Kong economy and stop the violence. To this end, it is the common hope of everyone who loves Hong Kong to find ways to let the parties lay down their differences and work together to safeguard Hong Kong’s prosperity and stability.

Export-oriented economy
As an export-oriented economy, Hong Kong is highly vulnerable to changes in the external environment. Therefore, for more than a year, all parties have different levels of psychological preparation for the economy to deteriorate. To understand the extent to which the Hong Kong economy will be affected, it is related to the diversification of the economic structure that was completed in the 1970s and 1990s:

From 1841 to 1951, Hong Kong had always been a purely trade-oriented port; from 1952 to 1969, its industrialized economy rose rapidly; and since the 1970s, Hong Kong’s economic structure has gradually shifted from industrial manufacturing to service-oriented. With the accumulation of industrialization in the past few decades and the changes in the external environment (the shrinking market in major western countries and the increasingly fierce competition in the production of labor-intensive products in other Asian countries), Hong Kong has to embark on the path of economic diversification.

As the most important sign of this stage, Hong Kong has formed itself as an international financial center. Real estate and tourism have also become pillar industries. The reform and opening up of the Chinese mainland is also constantly providing Hong Kong with new opportunities and development space.

Taking the Pearl River Delta region with similar geographical location, complementary industries and familiar culture as an example, Hong Kong has gradually formed a cooperation model of “pre-shops and post-factories”, and Hong Kong trade has gradually become the mainstay of entrepot trade from the Mainland. Factors such as a sound legal system, a package of shipping and financial services have helped Hong Kong become an international shipping hub.

From 1987 to 2004, Hong Kong was one of the largest container ports in the world. When Hong Kong returned to the motherland in 1997, its total GDP of 177.3 billion U.S. dollars accounted for 18.6% of the total GDP of the mainland; It accounts for about half of China’s total foreign trade. As a pillar industry, the current trade and logistics output accounts for more than one-fifth of Hong Kong’s overall GDP.

However, under the constraints of multiple complicated reasons, the “third upgrade” of Hong Kong’s economy has not yet been completed. It has a narrow industrial structure, a gradual loss of the advantages of traditional pillar industries, a highly light and economical structure, and a long-term plan for development. problem. Coupled with the rapid rise of the mainland shipping industry (especially the increasingly fierce competition among the ports in the Pearl River Delta), the diversion of goods has brought about a continuous decline in Hong Kong’s economic growth in the past decade or more:

In 2018, the total GDP of Hong Kong’s 636 billion US dollars accounted for only 2.7% of the total amount of the mainland in the same period; in the same year, the total GDP of Shenzhen separated by one river surpassed Hong Kong; this year, Guangzhou, the central city of Guangdong, Hong Kong, Macao and Dawan District, It is also expected to surpass Hong Kong.

There have been many discussions in various circles in Hong Kong, and various types of boosting measures have emerged. However, mode adjustment is not a one-off effort. Not only that, “Hong Kong is already a developed economy, and it seems that it is not right to look at its current situation with the eyes of the developing economies.” A mainland researcher who has been paying attention to the economic development of Hong Kong and Shenzhen in recent years told the Caijing reporter that “Hong Kong also has a fairly good foundation for financial and service industries. Since 2008, there has not been a technical economic recession, and it has remained close to the ‘people’. Employment, growth rate in developed economies is not low. To see the good side of Hong Kong’s economy.”

However, from the first quarter of 2018 to the second quarter of this year, Hong Kong’s GDP growth rate was 4.6%, 3.6%, 2.8%, 1.2%, 0.6% and 0.5%, respectively. This year, it has slowed down significantly, and the relative stability has gradually been break in. “On the one hand, the planning of the Guangdong, Hong Kong and Macao Dawan District has been officially launched. Is there any way for the Hong Kong industry to seize the opportunity? Let’s not talk about it. Interest is there.” The researchers said, “On the other hand, the global economy is growing slowly, China and the United States. The friction in the trade field has continued to expand into other fields, and the gray rhinoceros is close at hand. Hong Kong as an export-oriented economy is certainly not immune to it and must be adjusted.”

In 2018, some companies in Hong Kong also thought that they could “wait and see.” But at the beginning of 2019, the pace of adjustment was significantly accelerated. The mode of operation can be broadly divided into several categories: it can not be reconciled due to rising costs, etc.; low-end manufacturing such as toys and clothing gradually relocate factories to Southeast Asia; and large-scale enterprises are seeking In addition to creating a brand, it began to adopt regional thinking operations, such as putting the back-end production line in Vietnam, turning the Pearl River Delta city with strong industrial base such as Dongguan into a regional headquarters, and conducting technology research and development based on its efficient and complete industrial chain foundation. And the production of high-end parts, etc., combined to “sweet sugar cane two ends.”

The trick is that these adjustment effects are released, and the tariff impact is immediate. Take electronic products as an example: In 2018, the proportion of electronic products exported by Hong Kong to Hong Kong accounted for 68.3% of the total value of exports. According to a researcher from the Hong Kong Trade Development Council, most of the electronic products exported to the Chinese mainland through Hong Kong are semi-finished products, which are processed and then exported. Demand in the terminal market is reduced, and raw materials and semi-finished products that are transited through Hong Kong will be affected. If the production chain is transferred, orders will no longer need to be re-exported through Hong Kong. These will have long-term and comprehensive negative impacts on the demand for Hong Kong’s trade and associated services.

Taken together: Hong Kong’s overall exports of goods fell by 3.7% year-on-year in the first quarter of this year, and the decline in the second quarter further expanded to 5.6%. The decline in June was particularly noticeable (as of June, Hong Kong’s exports fell for the eighth consecutive month); Throughput: In the first half of 2019, Hong Kong handled only 9.06 million TEUs, down 8.1% year-on-year. Its global container port ranking was surpassed by Vietnam, falling from eighth to ninth. In the same period, Shenzhen and Guangzhou ranked fourth and fifth with 12.41 million TEUs and 10.94 million TEUs. In terms of air cargo (except airmail), the handling volume in the first half of this year also dropped significantly by 6.8% year-on-year. This is the first time Hong Kong has recorded this year’s decline since 2012.

“The current situation is that the ‘comprehensive trade in goods has caused the economy of Hong Kong to be on the verge of recession. It will have a maximum impact of 0.5% on Hong Kong’s GDP, which is higher than the expected 0.1% to 0.2%.” On August 27, the SAR Government and Qiu Tenghua, director of the Economic Development Bureau, warned.

Behind “Ding Cai is not prosperous”
In the second half of 2018, with the official operation of the Guangzhou-Shenzhen-Hong Kong high-speed rail and the Hong Kong-Zhuhai-Macao Bridge, the long-awaited passengers in Hong Kong’s tourism industry increased as scheduled. From October to December of that year, visitors to Hong Kong increased by 16.6% year-on-year; in the first half of this year, the number of passengers increased by 13.9%, of which nearly 80% were from the Mainland.

The trick is that the flow of people has grown, but it has not brought much benefit to the retail industry. From February to June this year, the overall retail sales of Hong Kong recorded a five-month decline, with a year-on-year decline of about 2.6% in the first half of the year. The decline in “jewelry, watches and precious gifts” increased to 17% in June. Correspondingly, retail sales have also decreased. According to the comprehensive market information statistics of Zhongyuan (Industrial and Commercial Shop): the sales of industrial and commercial shops began to fall for three months in May. In July, there were only about 325 transactions, a decrease of 25.1% compared with 434 cases in June.

Wharf Real Estate, which owns Tsim Sha Tsui Harbour City and Causeway Bay Times Square, announced its interim results recently. Its core profit only rose by 3%, and the business decline trend was obvious. Wu Tianhai, chairman and managing director of Wharf Real Estate, said frankly: Hong Kong’s retail environment is facing a “perfct storm”. There are various factors at the same time in the periphery and at home. It is impossible to predict that “the wind and the waves will have a few big”. Do it, do your job well.”

“This year’s Hong Kong land transportation is really poor. There is a wave of unrest and a wave of waves. The daily traffic on the streets has been reduced by more than half, and there is no time to chat with you.” On the afternoon of August 13, the Sai Yeung Choi Street, Mong Kok, Hong Kong. A leaf surname salesperson at a large chain of electrical appliance stores told the Caijing reporter that “the rent is high. In the past, in order to compete with the second-floor shops without street corner stores, the sales can be more discounted. Now the customers are coming. The less you do, the less you are. The days are getting more and more sad.”

“In addition to Hong Kong people tightening their pockets, there are still many reasons for the downturn. The short-term factor is that it is more convenient for mainland tourists to travel to and from Hong Kong. There is no need to buy too many things at once. On the other hand, jewelry, watches and high-end cameras have been popular products. However, as the economic slowdown in the Mainland has brought about consumption rational trends, tax cuts and anti-purchasing, dependence is becoming a fragile retail in Hong Kong. For example, Sony and Canon’s pricing strategies for some products and the exchange rate of Hong Kong dollars are now bought in the Mainland. It is often cheaper than Hong Kong and has a convenient warranty. Who will be afraid to go to Hong Kong to buy it?” said the salesperson.

Since July, “Wang Ding is not prosperous” is further becoming “Ding Cai is not prosperous”, and the number of visitors to Hong Kong in the first week of August has fallen more than 30% year-on-year. As of August 15, 29 countries and regions have issued different levels of travel tips to Hong Kong. The number of people coming to Hong Kong will be further reduced.

As a result, a series of long-term and short-term chain reactions are gradually emerging: Golden Bauhinia Square, Jordan Temple Street, Avenue of Stars, Ocean Park… Hong Kong’s famous attractions have seen a significant decrease in the flow of people during the summer peak season. The Hong Kong tour guide industry implements a zero-based salary system. It relies on commissions to “deliver food” (payroll). When the market conditions are good, the monthly salary can exceed tens of thousands of yuan. Many people use this to reserve the annual expenses. Although the current travel agencies and tour guides deliberately take marketing activities, but in order to ensure the safety of passengers, and fear of encountering demonstrations at the scenic spots, being reported to be small, it is more troublesome to be suspended, and it is in a “difficult situation”.

Wharf Real Estate, which owns Tsim Sha Tsui Harbour City and Causeway Bay Times Square, announced its interim results recently. Its core profit only rose by 3%.

Related to this is the hotel’s occupancy rate has fallen sharply. The prices of several reservation websites that the Caijing reporter recently inquired showed that many hotels in hot spots have experienced different price reductions. For example, in a hotel in Xihuan, the price of a suite of about 600 baht in 2018 may exceed 4,000 yuan (HKD, the same below), but now it is less than 600 yuan. “As long as I am willing to go to Hong Kong, the price of the hotel that is already a headache is not too big. The four-star hotel is only two or three hundred dollars, which is more suitable than the hourly room, so I am going to try several high-priced hotels in the near future. Stayed a few times.” Some passengers commented on a reservation website. In response to the response, the Hong Kong Hotel and Catering Practitioners Association recently issued a statement saying that “the industry was understaffed when the market was busy, and employees were also lax with the company. Employers should not slap their employees because of the worse business environment.”

The catering industry, which is closely related to it, was naturally not spared: in early August, the Hong Kong Catering Industry Association had investigated a number of practitioners. 99% of respondents believe that the company’s business has been affected, and 51% of respondents’ companies will reduce their manpower. “The unemployment rate in the catering industry is higher than the overall unemployment rate in Hong Kong. It can be seen that the catering industry has already sounded the warning sign into the cold winter.”

In order to make a living, all industries have called for the owners to “reduced rent and interest rates”. “Under the current predicament, owners should spend time with retailers, carefully consider the requirements of individual merchants in terms of rent and rental period, help the industry to survive the difficulties and protect the Hong Kong economy.” Mr. Xie Qiuyi, Chairman of the Hong Kong Retail Management Association . The Association has also published a half-size advertisement in some newspapers in Hong Kong. “To all retail shops in Hong Kong: I would like to spend time with the retail and catering industry to reduce rents to tenants for 60 months. I am grateful. !”

“There were some big owners who offered to waive one month’s rent in the 12-month lease during SARS. Some shopping malls now have sporadic actions, such as a one-time 20% rent reduction for merchants paying rent in August.” The staff recalled.

In the medium and long term, the opinions of many Hong Kong travel industry interviewers interviewed by Caijing reporters are mainly concerned with: First, whether the number of conferences and business travelers with higher net worth will decline significantly; The decline in the number of tour groups will lead to a significant reduction in the number of “turning customers”, which will mean that “the days of Hong Kong’s tourism industry may not be too good in the next few years”.

The financial situation is still stable
According to the latest statistics of the SAR Government: tourism accounted for 4.5% of Hong Kong’s GDP in 2017; the retail industry is roughly equivalent to 5% of Hong Kong’s GDP in that year. In contrast, the financial services industry and professional and industrial and commercial support services contributed about 31.1% of GDP in Hong Kong.

In the past six months or so, in addition to the volatility of the stock market, the data of various sectors of the Hong Kong financial industry remained relatively stable: in terms of total funds, after the outbreak of the financial tsunami in 2008, the world’s major central banks drove a lot of water. At that time, the total amount of funds flowing into Hong Kong was about 1 trillion yuan. At present, there is no obvious sign of “funding” (capital outflow) in Hong Kong.

“In 2018, I saw the flow of funds. The amount of outflows has only accounted for about 15% of the total inflows. In June and July, there was no large-scale flow of funds. Therefore, I don’t worry that the balance of the banking system will fall from about 170 billion yuan. 55.7 billion yuan, but I am happy to see the relevant situation, because the interest can be normalized.” Chen Maobo said.

According to the Hong Kong Monetary Authority (HKMA), as of the end of June this year, Hong Kong dollar deposits in authorized institutions (banks, etc.) increased by 0.5%, foreign currency deposits decreased by 0.4%, and RMB deposits decreased by 3.2%. The change was not significant; Hong Kong dollar M2 and M3 both rose by 0.5% in June and 3.5% year-on-year.

“There are many social events in Hong Kong in July, but Hong Kong’s financial markets, including the linked exchange rate, the Hong Kong dollar and the stock market, have not been significantly affected, reflecting the normal and smooth operation of the financial market. According to the June deposit data, Hong Kong dollar or US dollar deposits remain unchanged. Stable, there is no clear indication that funds are flowing out of the Hong Kong dollar or the banking system.” Chen Delin, the president of the HKMA, who will retire after the expiration of his term on October 1, said: “Hong Kong as an international financial center, social stability is an important condition, hope society Disagreements are resolved and resolved as soon as possible. I also hope that the differences will be resolved through peaceful and rational methods so that the Hong Kong community can return to normal as soon as possible.”

“Because of concerns about social problems, continued fermentation will increase the pressure of capital outflows… Market participants continue to hoard funds, resulting in a significant tightening of long-end liquidity, which in turn pushes up short-term interest rates. The stable banking sector has concluded that it has not yet appeared. The outflow of large-scale capital. In addition, Hong Kong stocks and the renminbi rebounded together, which further mitigated the risk of capital outflows.” An economist at a Singapore branch in Hong Kong analyzed in a recent report. There is also news that Singapore has recently proposed not to design marketing solutions, sell services and attract customers to Singapore in the near future.

Take precautions. Chen Maobo believes that Hong Kong has the following advantages: First, the liquidity coverage rate of the Hong Kong banking system is nearly 160%, and the capital adequacy ratio is as high as 20% (higher than the international standard of 8%), which are far higher than international regulatory requirements. Even if banks in Hong Kong are tightly funded, the banking industry holds nearly 1 trillion yuan in Exchange Fund Bills. Such assets are highly liquid. If the bank has any liquidity demand, it can be cashed to the HKMA at any time. Second, the HKMA has 4 trillion yuan of foreign exchange reserves to support financial and monetary stability. Therefore, when financial markets fluctuate, Hong Kong has Experience, strength and confidence to deal with.

“At present, there is no abnormality in the financial market in Hong Kong regardless of the banking system, capital flow or stock trading.” Chen Maobo said, “But the impact of long-term social unrest cannot be ignored. The Government will closely monitor the three major indicators of bank liquidity, stock market movements and short selling. To assess the security of the financial system.”

From past experience, if investors want to withdraw funds from Asia, Hong Kong is one of the cashier, efficient and efficient markets. Therefore, the Hong Kong Securities Regulatory Commission and the Hong Kong Monetary Authority have been strictly monitoring this statement.

In addition to banks, Hong Kong’s financial industry is divided into insurance and securities businesses. In part, the Hong Kong bond market was active in the first half of the year. In the first half of this year, the Hong Kong Stock Exchange had a total of 84 IPOs from the Hong Kong Stock Exchange. The amount increased by 39% year-on-year to HK$71.8 billion, and the number of new shares and fund-raising amount ranked first and third in the world.

The secondary market did show strong volatility: entering August, Hong Kong stocks have fallen by about 2,000 points in just a few days. Traffic, real estate, retail, etc., the stock prices of listed companies have been “plugged in”; in May this year, the Hang Seng Index once re-established a high of 30,000 points, on August 15 fell to 24,899 points, a volatility of about 20%; There are also brokerage reports: in the past ten weeks, Hong Kong stock funds continued to flow out and turned to safe-haven products.

On the whole, Hong Kong stocks are mainly institutional investors, most of which are foreign funds. Hong Kong stocks are closely related to the external environment and are directly and greatly affected by the external influence. Hong Kong has no control over capital in and out, and the stock market is highly liquid. From past experience, if investors want to withdraw funds from Asia, Hong Kong is one of the cashier, efficient and efficient markets. Therefore, the Hong Kong Securities Regulatory Commission and the Hong Kong Monetary Authority have been strictly monitoring this statement.

Ren Zhigang, a member of the Executive Council and former president of the HKMA, recently reminded that the chances of a Sino-US trade war turning into a monetary and financial war are heating up. As for the battlefield in which the financial war started, the “free, liquid, and wealthy Chinese financial market” may become the ideal battlefield. Although not nominated, the financial community generally believes that this statement refers to Hong Kong.

“The impact of social events is getting deeper and deeper. Fortunately, the financial industry in Hong Kong is still stable. If the financial situation continues to run out of control and the financial market is open, the economic situation in Hong Kong may be further worse.” Hong Kong financial industry analysts, The “Hong Kong-Shenzhen Observatory” public number master blogger pointed out to the “Financial” reporter pointed out. According to its analysis: The financial frictions between China and the United States (some of which have already appeared) include preventing Chinese companies from going public or delisting in the US, kicking A shares out of MSCI, and not using SWIFT and other US dollar payment systems.

“Some measures may cause global financial markets to fluctuate wildly. Hong Kong, as a bridgehead for capital, will certainly not be spared; there will be some opportunities for Hong Kong’s capital market to have new opportunities. Overall, it is ‘at risk. Hong Kong cannot control the overall situation and can do it. Only by maintaining an international perspective and understanding of the Mainland and actively developing its own strengths can it continue to maintain Hong Kong’s financial position.”

“Peace” responds to “technical recession”
Affected by a series of factors mentioned above, in the “troika” of trade, investment and consumption that together promoted Hong Kong’s economic growth, only consumption continued to grow in the first half of 2019.

At the end of July, Hong Kong’s second-quarter GDP estimates released by the Statistics Department of the SAR Government showed that the economic growth was only 0.6% year-on-year, the worst performance in a decade. After seasonal adjustment, the real economic growth in Hong Kong in the quarter was negative 0.3%.

The reason behind the analysis: Gross Fixed Capital Formation, which reflects investment spending, has fallen for the third consecutive quarter, down 12.1% year-on-year in the second quarter (down 7% in the first quarter); total exports and imports fell by 5.4% and 7 respectively. % (compared with 3.7% and 4.2% in the first quarter); local private consumption expenditure increased by 1.2% year-on-year (0.4% in the first quarter); government consumption expenditure increased by 4% (4.5% in the first quarter).

The further weakening of external demand and the weak internal demand have led to “the market generally expects Hong Kong’s annual GDP growth to be about 1% to 2%”, but the Hong Kong SAR government spokesman said at this time, “maintaining the annual growth forecast is 2%. To 3%.”

This relatively optimistic attitude has not been maintained for a long time. On August 16, the Hong Kong SAR Government published the “Half-year Economic Report” and related revision figures. After the mid-term re-examination, Hong Kong’s second-quarter GDP revision and detailed statistics became: GDP growth was revised to 0.5%, slowing from 0.6% in the first quarter; seasonally adjusted, recorded a negative growth of 0.4% quarter-to-quarter. In the first half of the year, total GDP increased by only 0.5%. In addition, private consumption in Hong Kong increased by 1.1% year-on-year in the second quarter. The increase was 0.4% higher than that in the first quarter. After seasonal adjustment, the second quarter fell 0.3% quarter-to-quarter; government consumption expenditure increased year-on-year. 4.2%, overall investment expenses fell 11.6% year-on-year (partly because large infrastructure has been completed).

The already poor numbers have to be lowered in many places. The weakest situation in Hong Kong since the first half of this year has not been surprising to all parties. And “the third quarter GDP has a good chance to record negative growth, will fall for two consecutive quarters, meaning that the economic situation is in a technical recession, will be the first since the financial tsunami in 2008.” Ou Xiong, an economic adviser to the SAR Government, said that the economic downturn in Hong Kong in the first half of the year was mainly affected by external factors… Social events will increase the downward pressure on the economy in the second half of the year, especially in the retail, tourism and food industries.

The so-called “technical recession” refers to the negative growth of GDP for at least two consecutive quarters, which is mainly caused by deflation, reduced investment activity and rising unemployment. According to historical data from the Caijing reporters over the past 20 years, Hong Kong has experienced such recession on three occasions during the Asian financial crisis, during the global technology stock bubble burst in 2001 and during the global financial crisis in 2008. .

During the 2003 SARS, which was frequently mentioned by the reserve side, Hong Kong only experienced a short-term negative economic growth in the second quarter, and soon rebounded. In the strong global economic trend that year, and the introduction of a series of foreign exchange policies in the Mainland, Hong Kong’s annual economic growth still exceeded 3%.

Affected by this, a number of financial institutions have also lowered their forecasts to less than 1%. “Deteriorating domestic demand and weakening demand for processing trade in the Mainland may cause losses to the Hong Kong economy in the coming quarters. The uncertainty surrounding the US-China trade agreement may also continue to weigh on corporate confidence and investment.” A bank economist said The moment is still “not the worst time for Hong Kong’s economy.”

On July 25, the “Standard Chartered SME Index” survey released by the Hong Kong Productivity Council in the third quarter of this year also showed that the comprehensive business index fell by 7.0 to 39.0 from the previous quarter, which was a low level in three years. The confidence of SMEs further faltered. Subsequently, the release of information from various sources has begun to give expectations to all sectors of Hong Kong: the SAR Government is studying the timely introduction of measures to achieve a counter-cyclical effect.

On August 15, the SAR Government announced that Hong Kong’s GDP growth forecast for the whole year was lowered to 0% to 1%. At the same time, a series of “businesses, employment, and employment, which are closely related to the lives of SMEs and citizens in Hong Kong. The measures to save the people will also be implemented from October this year, involving 19.1 billion yuan.

“The downward pressure on the economy in the second quarter is significant. The situation in recent months is even more severe. It is expected that the situation will remain grim during the rest of the year.” Chen Maobo said, “Frankly, I didn’t think about the recent events in February.” “The government saw the outside.” If the environment deteriorates, we must be prepared. We do not want the situation to be faced at the worst time. We hope that the most difficult situation will not arise, or the pressure of the citizens will not be too great when it comes.”

The “sweet sugar” specifically includes seven categories of government exemption for 27 government fees, 90% credit guarantee for SMEs, tax reduction, public housing rent-free for one month, CSSA and fruit grants.

For Hong Kong residents, including the salaries tax, personal assessment and profits tax, provide subsidies of $2,500 to kindergartens, primary and secondary students, and additional CSSA, Old Age Allowance, Senior Living Allowance and Disability Allowance. A one-time subsidy of 2,000 yuan for electricity, one-month rent for low-income public housing tenants, and one-time living allowance for non-N people. After the increase of the ceiling, the number of Hong Kong people who have fully enjoyed the tax rebate of $20,000 and the need to pay taxes has also increased a lot. The so-called “putting money into the pockets of the public soon”.

As far as the enterprise is concerned, the SAR government will further optimize the relevant special funds, and at the same time, the insurance company will open new credit guarantee products under the “SME financing guarantee plan” to assist those who are interested in starting a business to obtain funds. “Some of the measures for SMEs have been proposed by SMEs, and they have certain concessions in their conception. Some of the measures were introduced in the middle of last year, such as helping SME financing guarantees; and trade-related measures to help SMEs affected by orders are not able to adapt to market changes.” Qiu Tenghua analyzed.

“The SAR Government is making a move when Hong Kong’s economic situation shows a ‘comprehensive weakening’. It hopes to stabilize social confidence and reduce the expectation of economic recession. The ‘cyclical ammunition, which was reserved in the February Budget, can be said to be It’s in use.” Bo said that “from the rhythm, the policy was very flexible, and it’s not as time-consuming as before.”

The expenditure or reduction of the above series of policies has exceeded the estimated surplus of $16.8 billion in the 2019/2020 budget of the Hong Kong Special Administrative Region Government in February this year. This means that Hong Kong will likely have a deficit of 2.3 billion yuan. “As the relief measures are implemented in phases, expenditure will not be fully reflected in this financial year. Even if there is a slight deficit, Hong Kong’s fiscal reserves will remain stable. The Government should help the public to tide over the difficulties in difficult times.” The SAR Government spokesman explained Said in the relevant policy.

“The measures are expected to boost the economy by about 0.3 percentage points. For the Hong Kong economy, which is plagued by internal and external problems, this series of local fiscal stimulus and the loose monetary policy of the global central bank may help to slightly reduce the downward pressure on the economy and prevent all The annual economic contraction risk.” Xie Dongming, an economist at OCBC Bank, and Li Ruofan, an economist at Huaqiao Wing Hang Bank, analyzed in a recent report.

Looking forward to the October policy report
When the SAR government stated its position, it also left a live bond for “continuing the move”. For example, “in addition to the implementation of the 19.1 billion measures as soon as possible, it also proposed to continuously assess the economic situation. If necessary, it will introduce relief measures. Limited to the Policy Address or the Budget.

At present, the areas that may be out of the situation are the Hong Kong job market where all parties are highly concerned:

The reason why consumption can be the only “carriage” in Hong Kong in the first half of the year is mainly related to the relative prosperity of the stock market and the property market and the low unemployment rate, especially the latter. “Hong Kong people are known for their flexibility. In the past recession cycle, the economy may not be able to rebound quickly. However, everyone in Hong Kong under Lion Rock has a job, food, money, and building. Everyone is happy and hard. Hey.” Hong Kong resident Mr. Liu told the Caijing reporter.

On August 19, the statistics released by the Statistics Office of the SAR Government showed that the seasonally adjusted unemployment rate rose from 2.8% in April-February 2019 to 2.9% in May-July 2019. In addition to the market expectations of 2.8%, this is also the rate of unemployment in Hong Kong has risen again since May to July 2017, and the unemployment rate in the food and beverage retail-related industries has increased significantly. The number of unemployed people without seasonal adjustment increased by 4,200 to 117,500.

“The unemployment rate rose slightly by 0.1%, which is still low…. As the consumer market continues to be soft, the unemployment rate in the retail, accommodation and catering services industry is higher than in the previous period. In addition, under the decline of trade, import and export The pressure on the trade industry has increased and the unemployment rate has risen substantially since the beginning of the year.” The Secretary for Labour and Welfare of the SAR Government, Mr Lo Chi-kwong said, “As the economy is expected to remain weak in the coming months, the local labour market will inevitably face More pressure.”

There are also views that the current Hong Kong workforce has peaked, and even if the unemployment rate has rebounded, the magnitude will not be too great. However, the increase in numbers still makes many people wary. In fact, more than a few Hong Kong people have been worried since a few months ago. According to the City University of Hong Kong study: In the second quarter of this year, consumer confidence in Hong Kong has fallen by 10.5% year-on-year, the lowest level in five years.

“Without pay cuts, the unemployment rate is not high, and consumer confidence has fallen. When there is a real pay cut and layoffs, the decline in the consumption power of the citizens can be imagined. Eventually a cycle is formed, consumption loses momentum, and the economy’s troika stalls at the same time. “The Hong Kong SMEs accounted for more than 98% of local enterprises and employed 45% of Hong Kong’s employment. It is the mainstay of Hong Kong’s economy, but because of its low added value, it has to bear high rents. There must be a lot of water.” It is possible to make a profit, and the ability to withstand economic shocks is particularly vulnerable.”

If a large number of small and medium-sized enterprises can’t support the completion of their business, the basic employment situation in Hong Kong will be broken. Partly stems from this, a considerable part of the aforementioned 19.1 billion yuan relief measures are related to SMEs.

“Today, Hong Kong has reached an important juncture in the need for the community to tide over the difficulties. The main expenses of SMEs are salaries and rents. If the big owners can understand the difficulties of SMEs, they can alleviate the pressure on SMEs to reduce wages and layoffs. The society should not respond to… Further crackdown on the people’s livelihood economy… To vigorously stimulate the economic recovery, it is still necessary to put forward a good policy in the October Policy Address.” Hong Kong newspapers recently pointed out.

At the beginning of August, the Chief Executive of the SAR Government, Mrs Carrie Lam, publicly stated that the “Policy Report” to be introduced in mid-October proposed a number of “bold measures” to help Hong Kong’s economy recover and increase the momentum of Hong Kong’s economy. The policy address will also More bold measures to enhance Hong Kong’s international competitiveness and attractiveness, promote Hong Kong’s traditional advantages, the rule of law, and other potential aspects; in terms of people’s livelihood, the Government will examine some of Hong Kong’s deeper levels reflected in this incident. The issue of dealing with housing, health care, education, and the aging of the population, we need to pay attention to all aspects of the issue.

On July 29, Yang Guang, spokesperson of the Hong Kong and Macao Affairs Office of the State Council, said in his introduction of his position and views on the current situation in Hong Kong: “Development is the foundation of Hong Kong and the right way to solve various problems in Hong Kong. Some good family, with some favorable conditions and unique advantages, but can not withstand the toss… The SAR government and the whole society should find ways to take more effective measures to promote economic development and improvement of people’s livelihood, especially to help young people solve problems. Practical difficulties encountered in housing and academics, employment, entrepreneurship, etc. The Central Government is willing to work with the SAR Government and people from all walks of life in Hong Kong to create favorable conditions for their development.”

How much “bold” and “including gold” are included in the forthcoming series of policies, can we solve the political and economic disputes and make the society resume as soon as possible and realize “there are jobs and buildings”… More and more Hong Kong people are working I look forward to the answer.