Hong Kong’s shopping malls and restaurants hoping for Christmas cheer despite the looming shadow of China-US trade war
- Truce in international dispute brings some respite and industries hope usual seasonal trade will buoy businesses
Hong Kong’s shopping malls and food and beverage sector are embracing a cheerful Christmas but worries over the US-China trade war still linger among retailers.
Sun Hung Kai Properties’ general manager Fiona Chung Sau-lin is hoping for revenues of more than HK$787 million (US$101 million) from December 18 to December 26 in the 12 shopping complexes she oversees, a rise of 25 per cent on the same period last year.
Among them include Landmark North in Sheung Shui, which is popular with mainland Chinese day trippers, and PopWalk and Park Central, both in Tseung Kwan O.
During that period, a total of 14.5 million shoppers are expected to visit the malls, with overall footfall predicted to jump 24 per cent, Chung said.
She added that the trade war had limited effects on her shopping malls.
“If people don’t spend money now, then when? People usually buy things at Christmas,” she said.
Earlier this month, businesses breathed a sigh of relief after President Xi Jinping and his US counterpart Donald Trump agreed to hold back from applying extra tariffs in January to pave the way for a trade deal.
But questions have been raised over the impact of the 90-day truce following the arrest of Sabrina Meng Wanzhou, the chief financial officer of Chinese telecommunications giant Huawei Technologies.
Meng was detained on December 1 in Canada at the behest of US authorities after allegedly lying to banks that Huawei did not sell products to Iran in violation of US and EU sanctions.
Meanwhile, the Chinese yuan has weakened 9.6 per cent against the Hong Kong dollar since April, and this has lessened Chinese tourists’ desire to spend big in the tax-free city.
The K11 Art Mall in Tsim Sha Tsui, which is owned by New World Development, said the trade war and yuan depreciation would not have a big impact on its business as 70 per cent of its visitors were locals.
It anticipated a double-digit growth in the number of visitors and sales over the Christmas and New Year holidays.
The city’s dining sector is also hopeful. Simon Wong Ka-wo, president of the Hong Kong Federation of Restaurants and Related Trades, said the trade truce had relieved the mental stress among businesses.
He estimated local food and beverage business revenues would grow at least 5 per cent over the Christmas holidays, adding that many customers had started making bookings three weeks ago.
However, the retail industry remains cautious.
Mariana Kou Chung-yin, head of China education and Hong Kong consumer research for CLSA, cautioned that concerns remain despite the truce.
“It could just be an extension of a deadline. In the end, the US could turn out to be quite tough. So there still are some worries and it may not look like a concession to some people,” Kou said.
There was also the negative news such as the detention of Meng, which makes consumer sentiment a bit hesitant, she added.
Annie Tse Yau On-yee, the new chairwoman of the 9,000-strong Hong Kong Retail Management Association, said her members were saying the market was not ideal.
“We hope to see things pick up … When businesses can perform just like last year, it is already pretty good,” she said.
She said retailers of luxury goods would face greater challenges while sales of everyday products such as cosmetics would be relatively stable.
Tse Sui Luen Jewellery deputy chairwoman Estella Ng Yi-kum said she foresaw business performance at Christmas to be similar as last year.
But a spokeswoman for its rival Chow Tai Fook believed customer traffic would be decent during the festive season given Christmas’ status as a prime shopping period and the company’s annual sales from mid-December to January.
Hong Kong’s retail sector recorded a double-digit expansion for five months in a row from February to June, but the growth had slowed down to a single-digit in the following months.
For the first 10 months of this year, Hong Kong’s official figures estimated that the city’s retail sales revenues rose by 10.6 per cent to HK$401 billion on same period in 2017.