Cutting the number of solo travellers to Hong Kong will hinder the city's economic growth but only in the short term, according to a think tank's economic simulation.
South China Morning Post, June 13
Not much thinking going on in this think tank, methinks, at least not if it comes up with a howler like this. Contrary to what is implied here, non-resident spending is deducted from the raw figures on consumer activity when gross domestic product is totted up.
That's right. It is deducted from, taken away from, subtracted from the figures, not added to them.
They then take all that non-resident spending out of the figures so that it has no effect on GDP and they add in the amounts that Hong Kong residents have spent abroad. Thus if mainland tourist spending here now crashes, our economy will march on untroubled.
But I hear you. This is all wrong, you say. Things should be the other way round. What non-residents spend here is a boost to our economy and what Hong Kong people spend abroad is lost to us.
Go argue the toss with the Census and Statistics Department if that's what you think. All I can tell you is how they do it and, if you think it's wrong, then don't pay any attention to our economic growth numbers. They are all mixed up from the start anyway by your reckoning.
In fact, there is effectively a double deduction. The value of imports is deducted from the trade figures that go into GDP and pretty much all of what mainland tourists buy in our shops is imported.
But consider some other things. You may say that a drop in mainland tourism will put a number of people out of work and push up our unemployment figures. Yes, hurrah, it will. Our unemployment rate is 3.1 per cent, which is effectively full employment.
Construction bosses and restaurateurs are complaining loudly that they cannot find low-end manual labour anywhere.
And now they will be able find it with little need of re-training or dislocation. We won't have to open the gates to migrant labour. If falling tourist expenditure puts shop clerks on the street, there will be better jobs aplenty waiting for them. Less stress too.
Then there is that matter of sky-high shop rents and entire shopping districts turned into cheap jewellery outlets where Hong Kong people are not really welcome and where they have sense enough not to go anyway.
Hurrah! We shall get our shopping districts back. I may actually have reason to poke around Causeway Bay again some time. I certainly do not at the moment.
The long and short of it is simple. Tourism is a great starter industry for a bombed-out economy that is trying to get on its feet and has an oversupply of unskilled labour for menial jobs. That's not us.
In last Sunday's column I wrote that I thought the government's consultation on sourcing part of our electricity supply from the mainland (Option 1) is a fraud, as Beijing has already decided we must go that way.
Christine Loh Kung-wai, the undersecretary for the environment, has written me to dispute this. "Saw your piece on Sunday. You concluded that the government must have received pressure to propose Option 1. This is wrong. Just wanted to let you know. There has not been any pressure from the mainland or anyone else," she wrote.