“When the first round of vouchers was disbursed, we saw the atmosphere among retailers and restaurants was good … In August, we raised our outlook for this year’s overall economic growth from the original 3.5 to 5.5 per cent to 5.5 to 6.5 per cent.”

The HK$36 billion (US$4.6 billion) scheme, intended to boost local spending and accelerate the city‘s economic recovery amid the Covid-19 pandemic, offers every adult resident HK$5,000 in local spending vouchers, with about 7.2 million people eligible.

Hong Kong has been slowly emerging from a two-year retail slump, deepened by months of anti-government protests and, later, the coronavirus pandemic.

In July, retail sales rose 2.9 per cent year on year, but it was the lowest increase in six months. On a monthly basis, retail sales slipped 3.2 per cent compared with June. But authorities have long predicted the distribution of the e-vouchers would provide the economy with a boost.

“We hope the e-voucher scheme can also help stabilise the employment market as it spurs economic recovery, particularly as the retail, food and beverage and tourism industry employ a third of the city’s population,” Chan said on Sunday.

Confusion over e-voucher registration shows elderly need more help: lawmakers

Peter Shiu Ka-fai, the lawmaker representing the city’s wholesale and retail sector, said he was expecting a boost of up to 0.9 per cent from the e-voucher scheme.

“The atmosphere has been really good, with the coronavirus situation under control locally, Hong Kong winning at the Olympics, and businesses really stepping up and offering all kinds of deals,” he said. “So we’ve been seeing a very enthusiastic response from residents.”

Local consumption had managed to boost retail business to about 80 per cent of pre-pandemic volume, Shiu said.

But the best way to increase consumption was to reopen borders, he added.

“One-third of retail volume used to be from tourism, so if the borders still cannot reopen, the government will need to think of ways to help the industry again,” he said.

Late registration for the vouchers is set to close on Wednesday, and Chan urged elderly residents who had yet to sign up to get their applications in as soon as possible.

The minister had previously apologised for hiccups in the registration process that led hundreds of elderly residents – fearful they would miss out on the scheme – to queue for hours seeking help with their application forms.

Meanwhile, Chan also sought to allay fears that the expansion of the Qianhai economic zone in Shenzhen would eventually render Hong Kong obsolete as an international finance hub.

Originally created in 2009 to foster cooperation between the city and its Guangdong province neighbour, the economic zone is already home to 11,500 companies with ties to Hong Kong. It is expected to increase in size from 14.9 sq km to 120.6 sq km as part of a new expansion plan, which could entice even more businesses to set up in the area.

E-voucher scheme could boost economic growth by ‘as much as 6 per cent’

While few specifics have emerged to date, the plans call for a further opening up of the financial sector, support for the internationalisation of the yuan, greater interconnectivity with the Hong Kong financial markets and deepening cooperation between the bay area cities on green finance.

Chan said the expansion, coupled with the Wealth Management Connect scheme that allows both mainlanders and foreign investors access to wealth management products in Hong Kong, Macau and mainland China, would allow the city to further expand its role as an offshore financial centre for the world’s second-largest capital market.

“Hong Kong financial institutions can release different products, such as in risk and currency management to enrich the current market. We have a huge space to develop in those areas,” Chan said.

He added that the Qianhai expansion would also open up new high-level jobs for local youth and give Hong Kong corporations and residents a fresh perspective on opportunities across the border.