Gloom ahead for Hong Kong’s economy, but we can weather the storm
The city has a track record in dealing with downturns and a vast pool of resilience to tap into
When it comes to feeling the economic pulse, no one is supposed to be in a better position than John Tsang Chun-wah. So when the financial secretary paints a gloomy outlook in his latest economic forecast, the community should brace for the worst. From the domestic economy to the global outlook, there seems to be little reason to feel assured.
Indeed, the public does not need to learn that from the finance chief. More shops have gone and streets are apparently less crowded with mainland shoppers than before. There are also recruitment freezes and more layoffs across industries. Signs of an economic slowdown can be felt everywhere.
These are reflected in our official data. Visitor arrivals fell by nearly 11 per cent year-on-year in the first quarter, putting pressure on the retail and tourist-related sectors. Overall, the unemployment rate has crept up 0.1 percentage point to a two-year high at 3.4 per cent. Even though the situation in the second quarter has somewhat stabilised, after the economic growth has dropped to only 0.8 per cent in the first quarter of this year, the prospect is hardly encouraging.
Given our economy is highly external-oriented, we cannot escape global economic volatility. Although stock markets worldwide have somewhat recovered recently, the outlook is far from reassuring. Unstable development in Japan and euro-zone economies and Britain’s potential exit from the European Union have posed additional uncertainties. Whether the pressure on our economy can be eased in the second half of the year will depend on the performance of exports and tourist arrivals, according to the government.
If there is any comfort, it will be our track record in coping with economic fluctuations. Our resilience has been well tested. We suffered and learned our lessons; but each time we rebounded.
As Tsang said, the outlook is challenging. It is not surprising if the worst is yet to come. While we may experience more difficulties before coming to a turnaround, we must not lose sight of our strengths and potential.
The process will no doubt be painful. But we are blessed with the ability to adapt to changing circumstances. Adjustment is the key. With our perseverance and can-do spirit, we can weather the storm. The government should also closely monitor the situation and introduce appropriate measures to help different sectors tide over the difficult period.