Hong Kong unemployment set to continue falling but ‘hard times’ are ahead, finance secretary says

·4-min read

Hong Kong unemployment is expected to continue falling but the city is not yet out of the woods and wider Covid-19 vaccination uptake is needed to improve the economic outlook, the finance chief has said.

Financial Secretary Paul Chan Mo-po said on Sunday that jobless figures for April to June, to be announced on Tuesday, were set to return to the levels of more than a year ago, after dropping from a 7.2 per cent high at the beginning of 2021 to 6 per cent in May.

“But the reality is that even if the economy has recovered a little, quite a few industries are still facing hard times, and many residents are still under a lot of stress,” Chan wrote on his official blog.

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“To help the economy fully recover, we will have to continue with virus prevention work, and I sincerely ask everyone to get vaccinated to create the best conditions for recovery.”

The city’s unemployment rate hovered around 2.8 per cent throughout most of 2018 and the following year, but started climbing towards the end of 2019.

Financial Secretary Paul Chan. Photo: Nora Tam
Financial Secretary Paul Chan. Photo: Nora Tam

As the coronavirus pandemic hit the city in 2020, joblessness began to rise, eventually hitting 7.2 per cent between December 2020 and February this year – the worst figure since 2004.

Analysts have predicted unemployment could drop to about 5 per cent by the end of this year, depending on the pandemic situation and border control measures.

But they suggested a return to pre-pandemic levels was not imminent, a sentiment echoed by Secretary for Labour and Welfare Law Chi-kwong when he announced the most recent set of jobless figures.

Law had said the uneven pace of economic recovery across sectors would mean some industries would take longer to recover than others.

Chan’s call for residents to get vaccinated as the key to the city’s economic recovery was echoed by economist Andy Kwan Cheuk-chiu, who said it would take at least six to 10 months for the hardest-hit sectors, particularly tourism, to even start rebounding.

“It would be most prudent if those in the tourism sector can temporarily take up other jobs, as the border reopening is still up in the air,” he said. “And now we have new coronavirus variants to contend with. If those variants spread in the city, things get harder, unless people are vaccinated which would relieve some of the strain.”

Kwan said other industries, such as the retail, and food and drink sectors, were also recovering at a slower pace than expected, as those industries still required a shot in the arm from big spenders from mainland China.

Hong Kong retail sales up 10.5 per cent in May as growth appears to taper off

Unemployment in the tourism sector remained higher than the city’s average, at more than 9 per cent, the lawmaker for the industry, Yiu Si-wing, said.

“Unless we can resume cross-border travel, unemployment in the tourism sector will remain quite high,” he said. “At the moment many in the industry have taken unpaid leave and have taken up jobs elsewhere.”

Yiu said he hoped the government could provide aid according to the needs of each industry, adding that his proposal in the Legislative Council to offer more help to sectors hit hard by Covid-19 had garnered wide support from other lawmakers.

“This shows that society in general will not find it unreasonable to support sectors facing difficulties,” he said.

Hong Kong unemployment falls to 6 per cent as Covid-19’s grip on city eases

Separately, Chan also said more than 6.1 million people had signed up for the city’s consumption voucher scheme as of midnight on Sunday.

Five million of those who registered electronically were set to receive their first run of digital vouchers on August 1, worth HK$2,000.

Jobseekers attend a career day at the Hong Kong Convention and Exhibition Centre in May. Photo: Nora Tam
Jobseekers attend a career day at the Hong Kong Convention and Exhibition Centre in May. Photo: Nora Tam

All permanent residents and recent migrants from mainland China aged 18 and above are eligible for HK$5,000 in e-vouchers over two or three instalments beginning next month.

After chatting with diners at a dim sum restaurant with catering sector lawmaker Tommy Cheung Yu-yan on Saturday, Chan said he hoped more businesses would release promotions for residents who had signed up for the e-voucher scheme.

Hong Kong streamlines application process for HK$5,000 e-voucher scheme

“Some residents said they had been fully vaccinated and were excited to be able to yum cha with their friends and family once they received their e-vouchers,” Chan said, using the Cantonese phrase for going out together for food.

“The e-voucher scheme helps make life easier, and I encourage various businesses to release more deals. The more business there is, the more benefits there are for residents, which will help society, the economy and employment.”

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