Hong Kong’s Economy: More Support for Locals and Businesses
Hong Kong Government to Introduce New Measures in Tougher Economic Times
Hong Kong’s economy experienced downward pressure in its second quarter. The government is putting measures in place to support the people and local businesses.
Escalating trade tensions between US and China have caused further uncertainties for Hong Kong’s economy. In recent months, the situation has become even more serious due to several factors. This includes sluggish trade and industrial activities in Asia and market concerns about the possibility of recession. Other concerns include an impending risk of a hard Brexit, and ongoing geopolitical tensions in the Middle East.
Domestically, Hong Kong’s economy has also been hit by recent social incidents. Particularly in tourism, restaurant, and retail trade. This was another blow to the country’s already weak economy. So far, 29 countries in total have issued travel alerts at different levels against the country. Concerns have also been expressed by international credit rating agencies about what’s happening in Hong Kong.
The current assessment is that Hong Kong’s economy will continue to face an austere outlook for the remainder of the year. Therefore, the government needs to revise its real growth forecast for 2019 downwards. To overcome the external challenges to the economic environment, the government is introducing support measures. These supported packages are aimed at safeguarding jobs and providing support for small and medium enterprises (SMEs).
Support Measures for the SMEs
SME’s are the cornerstone of Hong Kong’s economy. They account for 45% of total employment, and 98% of local enterprises. The support measures introduced will include:
- 27 groups of government charges and fees will be waived for 12-months.
- Short-term tenancies to get a reduction in rental for most community and business use.
- Implementation of a few review moratorium on government charges and fees.
- Additional injections in the Dedicated Fund on Branding, Upgrading and Domestic Sales (BUD Fund) and SME Export Marketing Fund.
- New loan guarantee product under the SME Financing Guarantee Scheme (SFGS) to be introduced by HKMC Insurance Limited.
- Specific training programmes to help the under-employed and unemployed under the Employees Retraining Board.
- Continued exploration into increasing or expediting minor work projects for public need and employment opportunities in the construction sector.
Measures to Relieve the Hong Kong Residents Burden
In the bleak outlook for Hong Kong’s economy, the government also aims to provide measures to relieve the people’s burden. These measures include:
- Social security recipients to receive extra allowance. Similar arrangements will be applicable to recipients of the Working Family Allowance and Individual-based Work Incentive Transport Subsidy.
- Subsidies will be given to kindergarten, primary and secondary day school students.
- Personal assessment and profits tax for YA 2018/19 will be reduced further to the proposals made in the 2019-20 Budget.
- Lower-income tenants to receive one months’ rent.
- Each residential electricity account to be given a one-off electric charge subsidy of $2,000.
- One-off living subsidies for lower-income households. Applicable to those not getting CSSA and those not residing within public housing.
- Relief proposals currently being formulated by several Hong Kong authorities, including:
- Hong Kong Science and Technology Parks Corporation
- Hong Kong Housing Authority
- Airport Authority Hong Kong
- The Construction Industry Council