Hong Kong government tops up stimulus with extra US$511 million

Hong Kong government tops up stimulus with extra US$511 million

Protests ordered for lunch all week in Hong Kong's business district (3)
Workers from the advertising sector attend a rally to commence a five day strike, at Chater Garden in Hong Kong on Dec 2, 2019, to demand the government to respond to the five demands of the city's protest movement.  (Photo: AFP/Anthony Wallace)

HONG KONG: Hong Kong's government pledged HK$4 billion (US$511 million) on Wednesday (Dec 4) in new relief measures to help bolster an economy battered by months of protests that have eroded business confidence in the Asian financial hub.

The latest boost brings the government's total pledged amount of relief to HK$25 billion. It remains to be seen whether that will be enough to help the economy, reeling from a drop-off in tourism and a record decline in retail sales.

The International Monetary Fund on Wednesday urged the government to deliver "significantly" more fiscal stimulus to address the downturn and longer-term structural issues such as insufficient housing and income inequality.

READ: Hong Kong to unveil depth of recession amid protests, trade war

"During an economic downturn, supporting employment is the number one priority of the government," Financial Secretary Paul Chan said as he announced the package.

FILE PHOTO: Protests at Hong Kong's university campuses
FILE PHOTO: Protests at Hong Kong's university campuses

Chan described the measures as mainly aimed at helping small and medium-sized businesses, in order to safeguard jobs. He told reporters that the anti-Beijing demonstrations had hurt international investor confidence in the China-ruled city.

Business activity in Hong Kong contracted at the fastest pace in 21 years in November, dragged down by the protests and softening global demand, an IHS Markit survey showed on Wednesday.

READ: Commentary: A very gloomy outlook for Hong Kong’s economy

Asia's largest distributor of luxury brands, the Blubell group, has appealed to Hong Kong landlords to scrap the base rent in shopping malls, saying a slump in tourist spending will push even more retailers out of business.

Hong Kong recorded its largest-ever retail collapse in October, with sales dropping 24.3 per cent to HK$30.1 billion, the government said Monday.

Sparked by a controversial and since-withdrawn extradition bill, the protests have swelled into broader calls for greater democratic freedoms.

Those who have joined the pro-democracy demonstrations accuse China of increasingly interfering in freedoms promised to the former British colony when it was returned to Chinese rule in 1997.

MORE: Our coverage of the Hong Kong protests

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Source: Reuters/aa

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