Hong Kong’s finance chief has said more relief measures will be rolled out if necessary, warning the protest-plagued city’s economy could enter a recession.
In an interview on Wednesday with nationalist tabloid Global Times, Financial Secretary Paul Chan Mo-po also said he was not worried about growing competition from Shanghai and Shenzhen, as the city had always been “free and open”.
Growth in the second quarter stood at 0.6 per cent year on year. But Chan noted that the city’s economy had shrunk on a quarter-to-quarter basis, citing the impacts of political unrest and the Sino-US trade war. He warned the downward trend was set to continue in the third quarter.
“Once this happens, Hong Kong would technically plunge into economic recession,” he told the newspaper, which is owned by Communist Party mouthpiece People’s Daily.
“The economic situation of the fourth quarter will depend on whether the social turmoil can be alleviated as soon as possible.”
The government might roll out more relief measures for the business sector if necessary, he added.
Chan’s remarks come amid a citywide movement against the government and the police, sparked by opposition to a piece of extradition legislation that the government has since suspended and pledged to fully withdraw – a key demand of the protesters.
Disgruntled residents have pledged to continue their fight unless the government addresses their four remaining demands, which include an independent inquiry into the police’s use of force and the implementation of universal suffrage.
The administration had warned of a possible recession in the third quarter, and downgraded its growth forecast for the year to anywhere between 0 and 1 per cent, from 2-3 per cent previously.
Last month, Chan spelled out a number of economic measures worth more than HK$19 billion to mitigate the adverse effects of the economic headwinds on small and medium-sized businesses. He said at the time he hoped the measures could help boost the economy by 0.3 per cent.
In the interview, Chan said the government would beef up efforts to promote Hong Kong when the unrest ends, but argued the economy in the fourth quarter would still face tough challenges as tourism and businesses took time to recover.
He also said Hong Kong could supplement and collaborate with major mainland Chinese cities Shanghai and Shenzhen.
“The city has always been free and open and we do not have to be afraid of competition. What we fear is that we are not going for it,” he said.
He also said the policy address – to be unveiled by Chief Executive Carrie Lam Cheng Yuet-ngor in October – would float concrete proposals to address the city’s housing woes.
Chan said the government would proactively study the possibility of developing pieces of rural land for public housing, using the Lands Resumption Ordinance if necessary.
“We have invoked the Lands Resumption Ordinance to take back land, and we will continue to use it in future,” he said.
We have invoked the Lands Resumption Ordinance to take back land, and we will continue to use it in future
Financial Secretary Paul Chan
Hong Kong’s rural powerhouse the Heung Yee Kuk on Tuesday criticised a proposal by a fellow pro-establishment group to invoke the draconian law to forcibly take back land from private owners for public housing.
The kuk, a government-recognised body representing the interests of indigenous villagers in the New Territories and widely regarded as a key force in the pro-Beijing camp, slammed the suggestion, saying it went against the spirit of the city’s mini-constitution, the Basic Law, on respecting private property.
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