• Mon
  • Dec 29, 2014
  • Updated: 8:34pm
NewsHong Kong
ECONOMY

Jobless rate could rise if retail sales keep declining, financial secretary warns

Poor April figures and troubling external business factors worry financial secretary

PUBLISHED : Monday, 09 June, 2014, 3:03am
UPDATED : Monday, 09 June, 2014, 9:51am

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.

In his blog, Tsang said that he was worried when he found out about the April figures.

"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."

 

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This article is now closed to comments

Dao-Phooy
Does anybody have time for this man? He never gets his budgets right, and hasn't got a clue how to help ordinary Hongkongers despite sitting on a mountain of cash. John Tsang please just resign and enjoy your time drinking coffee and watching French movies on your guaranteed fat pension.
mcheung
Annual growth in retail sales of 9-12% is just unsustainable! This kind of growth just benefits the greedy landlord, which drives up prices for the local consumers. There is nothing wrong with a 5% annual growth!
rpasea
Good. Then no need to import workers for other sectors.
sipsip1238
So our treasurer, who is suppose to know things about how economies work, says that he is worried about the economic cycle doing what it is suppose to do...unemployment, retail sales, everything can't be positive forever dear sir, if it can, you wouldn't have a job in the first place.
eddywonlung247
Effecting the retail business in Hong Kong? You mean the Gold , jewelry , watches property cross border trading ,from all that laundering money that's brought into Hong Kong and also filling the pockets of all those corrupt Hong Kong governments pockets so that they can continue to live a lavish life style.No Thanks!!!
impala
Hang on, I thought we were short of low-skilled workers? Which one is it now, labour shortage or rising unemployment? You can't have it both ways Monsieur Tsang.

Only some weeks ago, in particular shortages of such workers in the construction industry were cited as a reason to invite more people to come and work in Hong Kong. I suppose that won't be necessary anymore then?
chuchu59
Oh, gimme a break. Once again, our FS is sending out alarms through his blog to protect the business community and exert pressure on the CE. Its pretty much like a couple of months ago where he screamed that our surplus will soon be eroded if we continue to spend. As FS, he shouldnt be stating something that is plain obvious ie the unemployment rate will go up if retail sales continue to shrink. He should be suggesting solutions which on the one hand will maintain our unemployment rate at a low level and on the other hand diffuse the tensions between HK people and mainlanders. The guy is, as usual, employing scare tactics without offering any constructive solutions.
virokick
1)Retail sales down = jobless rate( slightly)up = property prices down = HK people happy.
2)Retail sales down = Property Prices down = Mainland Speculators out= HK happy.
In the long run ;
3) Retail sales down = other industries up= local business up= jobless rate down= HK people happy
4) Retail Sales down =Financial Secretary Out + Chamber Of Commerce Start Whining = HK people happy.
5) Retail sales down = mainland numbers down= over crowding down= HK happy.
teresaleema
Please do something to diversifying HK ecnomony and don't find this shxt excuse to let those mainlanders come in !!! Soley rely on retail business which mainly depends on people's mood is unwise and very risky !!!
Byebye
Cut cost then. First cut salaried of fat cats of the government, reduce their benefits.

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