Will new travel permits for Hong Kong permanent residents hurt the economy?
- Economists say city’s already struggling retail and restaurant sectors could suffer, but are divided over strength of impact
Even as latest figures released on Tuesday showed retail sales slipping for the second month in a row, observers said the city had to look at the big picture and the long-term benefits of the policy change.
The potential impact of permanent residents – even if it is all 270,000 of them – spending on the mainland instead of in the city may hurt some businesses but the situation will even out over time.
Kevin Tsui Ka-kin, the chief economist at research firm Orientis, predicted there would be some impact on consumption in the city, but insisted it would be short-term.
He added the policy could attract more people from overseas to the city in the long run, which could also help broaden a talent pool dominated by people from the mainland.
“A lot of expatriates left during the pandemic. This could serve as a new incentive for them to come back to Hong Kong, which will be beneficial for local consumption and the overall business environment as well,” he said.