Hong Kong leader Carrie Lam pledges 4th round of economic relief measures

In a photo taken on Dec 3, 2019, Hong Kong Chief Executive Carrie Lam speaks during a press conference at the government headquarters. PHOTO: AFP

Hong Kong's slumping economy - hit by the double whammy of domestic unrest and the US-China trade war - has forced the government to announce a fourth round of relief measures.

Chief Executive Carrie Lam yesterday said the government is looking to provide "targeted" help to "support businesses, protect jobs and livelihoods".

"The new move comes after our previous three rounds of relief measures rolled out in August, September and October. The financial secretary will announce specifics of the fourth round of initiatives shortly," said the city's top official.

Previous measures amounting to over HK$21 billion (S$3.7 billion) included a raft of new policies such as more relaxed mortgage rules, compulsory land purchases for housing and increased subsidies for low-income families. There were also fuel subsidies for commercial vehicles, cash incentives for tour operators and waivers on government fees for firms, particularly small and medium-sized enterprises.

Mrs Lam also expects the current low unemployment rate of 3.1 per cent to rise as more businesses are affected by the ongoing anti-government protests.

Data released on Monday showed that retail sales fell by a record 24.3 per cent in October - a period which usually sees more mainland visitors to Hong Kong and sales spike due to the "Golden Week" Chinese holiday - making it the fourth consecutive month of double-digit declines.

Separately, on Monday, Financial Secretary Paul Chan painted a grim outlook for the city, cautioning that Hong Kong was expected to record its first budget deficit in 15 years and that output growth in the economy could contract by two percentage points.

The deficit would be driven by an adverse economic environment, lower tax revenue and income from land sales, as well as the cost of recent economic sweeteners, he said. He added that the forecast was for the economy to contract by 1.3 per cent in 2019.

However, some experts are critical of the relief measures. Economics professor Terence Chong from the Chinese University of Hong Kong, for instance, has criticised the lack of focus, likening the previous government measures to "giving out money randomly".

"The unrest has hit sectors differently, with some hit but others like the bus companies benefiting from the shutdown of the MTR.

"You have to make sure that the sector you're helping is in need. You give money to restaurants but not every restaurant needs help or is in the protest areas," said Dr Chong.

He also said that if the government targeted aid at those who truly needed it instead of across the board, "the money involved will not be that much".

Speaking before the weekly meeting of the Executive Council or Cabinet, Mrs Lam yesterday also touched on the Hong Kong Human Rights and Democracy Act signed into law by US President Donald Trump last week, in a show of Washington's support for the protesters in Hong Kong who are demanding greater freedom from Beijing.

The legislation calls for an annual review of the special trading status Hong Kong enjoys with the United States and allows for sanctions against those found violating human rights in the territory.

Mrs Lam described the US legislation as clearly an interference in the city's affairs and said it created an uncertain business climate that undermined investor confidence, including the 1,300 American companies in the city.

On Monday, China retaliated against Mr Trump's move by suspending US warship visits to Hong Kong and imposing sanctions on some non-government US organisations in the city. Mrs Lam yesterday said her government would cooperate with China's Foreign Affairs Ministry on the moves.

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A version of this article appeared in the print edition of The Straits Times on December 04, 2019, with the headline Hong Kong leader Carrie Lam pledges 4th round of economic relief measures. Subscribe