Advertisement
Opinion | Pandemic’s dark clouds still cast a shadow over Hong Kong’s economy
- Like other high-income economies, Hong Kong’s ability to vaccinate and provide financial support is helping it towards an earlier recovery
- But its draconian quarantine scheme and the mainland border closure have muddied prospects of a jobs and wages recovery
Reading Time:4 minutes
Why you can trust SCMP
1
Financial Secretary Paul Chan Mo-po this week celebrated encouraging GDP data, predicting that Hong Kong’s economy was heading for 6.5 per cent growth this year after huge contractions in the past two years. But he also acknowledged a remaining dark cloud: wages and jobs have flatlined with little chance of recovery until our borders reopen and tourists return.
The cold comfort is that the pandemic’s economic harm could have been worse. Without last year’s HK$300 billion (US$38.5 billion) in stimulus measures, and the HK$120 billion promised for this financial year, bankruptcies and unemployment might have soared.
Bankruptcy data from the Official Receiver’s Office tells a fascinating story. Through the severe acute respiratory syndrome (Sars) epidemic, bankruptcies leapt to over 2,000 a month on average. In 2009, after the global financial crisis, they jumped to more than 1,000. But throughout the pandemic, bankruptcies fell to fewer than 600.
Advertisement
It is at this time of unprecedented pandemic-induced adversity that we must give thanks for the “rainy day” security provided by our fiscal reserves, which even after relief measures remain at over HK$800 billion. Hong Kong is among a tiny fortunate group of economies that have not had to take on huge new debt.
Hong Kong’s workforce data is harder to read and casts a darker shadow. Unemployment, which was at 2.8 per cent in 2019 before the street riots and pandemic, surged to a 17-year high of 7.2 per cent between December last year and February this year, before sliding back to 4.5 per cent. As usual, female workers, youngsters under 25, and people with low skills have been worst hit.
04:53
Jobless struggle to make ends meet in Hong Kong as city battles coronavirus and recession
Jobless struggle to make ends meet in Hong Kong as city battles coronavirus and recession
Add in the underemployment numbers that attempt to take account of those in part-time work or on limited hours, and the recovery from December-February has been larger, from an aggregate 10.7 per cent to 6.7 per cent.
Advertisement
Select Voice
Choose your listening speed
Get through articles 2x faster
1.25x
250 WPM
Slow
Average
Fast
1.25x