With the coronavirus beginning to exact its economic cost, Hong Kong must brace itself for a tide of woe

Unemployment and bankruptcy figures are beginning to hint at the ravages of the economic damage. Financial Secretary Paul Chan may have to dip further into the city’s massive fiscal reserves to provide a safety net

Reading Time:4 minutes

A man wearing a mask stands before the city skyline on the first day of the Lunar New Year of the Rat in Tsim Sha Tsui, Hong Kong, on January 25. Photo: AFP

Published: 9:30am, 21 Mar 2020Updated: 9:39am, 21 Mar 2020

As debate now wilts over whether the world’s economies are crashing into a pandemic-induced recession, attention is turning to how deep it will be and how long it will last. The answer is deep – and how long it lasts depends on management of the pandemic itself and on how governments and business leaders respond.

Martin Wolf at the Financial Times may have been stating the obvious when he said, “Think big. Act now. Together.” But governments have dithered and conspicuously failed to work together on either the pandemic or the management of the catastrophic economic impacts.

So far, equity markets have crashed worldwide on the basis of little more than anecdotal glimpses into the economic impacts of the pandemic. It is only as firmer and more comprehensive numbers begin to crystallise that we will get an accurate grasp on the scale and duration of the recession ahead.

The anecdotal glimpses so far have been concentrated on tourism, aviation, hotels and restaurants, and on the cancellation of socially and economically significant events.

These have been enough to generate deep alarm. Mainland tourist arrivals to Hong Kong cannot fall from 200,000 a day to 3,000 a day without massive harm across a tourism-related sector that employs 626,000 people.

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