OpinionWhy slower economic growth may not be a bad thing for Hong Kong

Bernard Chan says with an economy at full capacity and after years of high rents and housing costs, a return to more affordable prices should be welcomed

Hong Kong’s 2019 fortunes will rest on many factors, not least the outcome of the US-China trade talks, Brexit, and China’s challenging economic transition

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A return to more affordable housing prices in Hong Kong would not only help people get homes, it would help ease a critical social problem and political discontent. Photo: EPA-EFE

Published: 7:00am, 4 Jan 2019Updated: 7:05am, 4 Jan 2019

After a volatile year for China-US relations and the markets, it would be nice to think we can look forward to a calm and uneventful 2019.

Pessimists are expecting the worst. A recent round-up of bearish forecasts includes significant falls in the Hong Kong property and stock markets, a slowdown in mainland China, along with a weaker renminbi, and signs of looming recession in the United States – all made worse by a serious breakdown in US-China economic relations.

As a small open economy, Hong Kong is highly exposed to the ups and downs in the rest of the world. Already, we are hearing warnings from officials who are nervous about revenues and eager to manage expectations about budget handouts. And we are hearing business representatives calling for tax cuts and other measures. This is before we have any real signs of a serious downturn.

To put it into perspective, Hong Kong’s gross domestic product grew 3.7 per cent in the first three quarters of 2018 and the unemployment rate for September to November was a low 2.8 per cent.

It is understandable that our officials worry about possible economic downturns. We know from experience that things can change fast. And these shifts in global economic conditions are completely beyond Hong Kong’s control – we are largely helpless to do much about it.