There will be little Christmas cheer for Hong Kong retailers, new chief of industry body warns
- Annie Tse, chairwoman of 9,000-member Hong Kong Retail Management Association, says market turmoil and trade war have taken toll
Hong Kong retailers will have to brace for a slack Christmas as shoppers’ appetite has been dampened amid volatile stock and property markets, a weaker yuan and the US-China trade war, according to the new head of an industry body.
Annie Tse Yau On-yee, who was elected chairwoman of the 9,000-member Hong Kong Retail Management Association last month, said on Thursday that Christmas sales would at best be flat compared with last year, partly because of high growth a year ago and the current hostile operating environment.
She said overall retail sales between October and December would be lacklustre having shrunk gradually since February, from 29.9 per cent growth to September’s 2.4 per cent rise.
“The outlook is very uncertain,” Tse said. “We have seen the impact of the trade war surface, which together with yuan depreciation has dampened mainland visitors’ desire to come and shop in Hong Kong.”
The government is expected to reveal October’s retail sales figures on November 30. For 2018, Tse expected a “high single-digit rise” after an 11.1 per cent jump in the first nine months of this year.
Hong Kong has been trapped in the trade spat between China and the United States, which imposed punitive tariffs on each other since July. Vincent Lo Hong-sui, chairman of the city’s trade promoter, the Hong Kong Trade and Development Council, warned earlier this month that the upcoming Lunar New Year, in early February, would be a testing time for the city’s economy as the trade war intensified.
A 10 per cent tariff the US levied on US$200 billion worth of Chinese goods is due to rise to 25 per cent on January 1.
Tse said the trade war had already soured the stock market, which in turn eroded people’s desire to shop and the wealth effect. The benchmark Hang Seng Index has come off from its all-time high of 33,154 on January 26 to 26,019 on Thursday.
Although Hong Kong launched two mega cross-border infrastructure projects in the past two months, the retail sector had seen little benefit so far, she said.
“We have seen more visitors in West Kowloon since the high-speed rail link came into service,” she said. “Since the bridge opened, many tourists have come to Hong Kong on a day trip and have concentrated on Tung Chung. We are sympathetic towards Tung Chung’s residents. But we haven’t seen visitors from these two projects spill over to other parts of the city yet.”
The 26km Hong Kong section of the Guangzhou-Shenzhen-Hong Kong Express Rail Link, which opened in September, terminates at West Kowloon and connects the city with China’s 25,000km network.
The 55km bridge, which links Hong Kong, Zhuhai and Macau, has become a popular spot for mainland tourists since it debuted on October 24. An influx of tens of thousands of visitors into Tung Chung for shopping, dining and sightseeing by public transport has wreaked havoc on residents’ daily lives.
Hong Kong’s tourist arrivals soared 9.5 per cent in the first nine months of this year, with the number of mainland visitors jumping 12.7 per cent.