Hong Kong announces $421-mn stimulus to fight economic crisis

Hong Kong: Hong Kong authorities on Wednesday announced a fresh round of economic measures worth HK$3.3 billion ($421.5 million) to help boost the economy, hit by repeated protests and the ongoing trade war between China and the United States.

Hong Kong Financial Secretary Paul Chan said the aid was aimed at boosting liquidity in small and medium sector enterprises (SMEs).

He said during an economic downturn, supporting employment was “the number one priority” for the government as it was key to economic growth, Efe news reported.

Chan announced a list of nine new measures for companies and individuals, such as allowing tax payment in installments and cash subsidies for water and sewage charges, apart from exemptions from such charges for businesses.

Small firms are set to receive subsidies for their public utility bills, to help them face an impending downturn and boost investor confidence.

The budget bill presentation would be postponed until January, later than usual, so that these subsidies could be approved by the local legislature.

This is the fourth economic stimulus package after the government had previously offered around HK$ 21 billion in similar measures to help the transport, tourism and retail sectors.

The measures are expected to generate around 2 per cent growth in the city’s GDP and compensate for the losses, also estimated at nearly 2 per cent.

The measures were announced on a day when the International Monetary Fund urged the Hong Kong government to “significantly” boost financial stimuli to deal with the downturn and long-term structural issues, such as housing shortages and income inequality.

The image of Hong Kong, considered one of the biggest financial hubs worldwide, has been hit due to the instability caused by the anti-government protests that have raged in the city since in June, often resulting in violent clashes.

The city’s rank has nosedived in the Expat Insider survey by InterNations, which lists the best cities for expats, due to the rising housing prices, high cost of living and long work-hours.

Although Hong Kong has been known to expats for offering similar security levels to Singapore and Shanghai, a recent survey showed that the perception might be changing due to the violent protests in recent months.

“Most of us expats are here for economic reasons so that occupational safety could be the decisive factor for many when deciding whether to stay or leave,” a Spanish businessperson from the hospitality industry, who chose to identify himself as MP, told EFE.

“Some small business owners and freelancers are already feeling the impact and returning to their countries,” he said.