Jobless rate could rise if retail sales keep declining, financial secretary warns
Poor April figures and troubling external business factors worry financial secretary
Hong Kong's unemployment rate of 3.1 per cent may go up if retail sales continue to shrink and the external business environment does not improve, Financial Secretary John Tsang Chun-wah warned yesterday.
He sounded the alarm on his blog after the Census and Statistics Department announced last week that retail sales in April dropped 9.8 per cent year-on-year to HK$38.8 billion, or 9.5 per cent in volume.
"If the external environment does not show obvious improvements, and retail sales continue to shrink, there will be huge pressure on the employment market. The currently low unemployment rate of 3.1 per cent may rise, affecting low-skilled workers in particular," he wrote.
He pointed to the anti-government protests in Thailand and the anti-China protests in Vietnam as factors in the declining economy.
On anti-mainland tourist sentiments, Tsang told Hongkongers not to harm the city's image as the "capital of hospitality", which had taken many years to build.
About 40 million mainlanders visit Hong Kong each year, but that figure is projected to hit 100 million by 2020, putting an ever-greater strain on the city.
Meanwhile, Caroline Mak Sui-king, chairwoman of the Hong Kong Retail Management Association, warned yesterday of lukewarm growth in retail sales for the whole of this year, lowering the initial growth forecast of 9 to 12 per cent year-on-year to just 5 per cent.
"Growth of 5 per cent this year is already an optimistic forecast. It may even be lower. I hope the figure will not end up being zero or even a negative one," Mak told a TVB talk show.
She said poor performance in the retail industry could trigger a ripple effect, affecting the wholesale and advertising industries.
She is also pessimistic about retail sales for last month.
Some economists have blamed the gloomy sales figures on the effects of the anti-corruption drive Beijing launched in 2012, curbing the spending by officials on luxury gifts.
Mak supported the idea of building shopping malls in the border areas, as for many mainlanders the main purpose of visiting Hong Kong was to shop. Not only would building malls help the economy, it would also shift visitors from crowded central districts to border areas.
Commenting on the recent protests against mainland tourists, Mak said: "If the mainland tourists find that Hong Kong does not welcome them, they will find somewhere else to go."