Tycoon Li Ka-shing has donated HK$1 billion (US$127.5 million) to help Hong Kong’s small and medium-sized entrepreneurs withstand the twin setbacks of a slowing global economy and the city’s grinding protest crisis.
The Li Ka Shing Foundation on Friday said the fund would complement the government’s relief measures – but how that would work had yet to be ironed out with city officials.
The foundation noted that Hong Kong economy faced “unprecedented” challenges amid a slowdown in the world economy.
“I hope the HK$1 billion from the foundation can play a leading role. I encourage different sectors to give their opinions, work together and pool our wisdom,” said Li, the foundation’s chairman, in a statement.
Last month, the government said smaller Hong Kong companies caught in the crossfire of the city’s protests and the US-China trade war would have immediate access to funding worth up to HK$35 billion.
I encourage different sectors to give their opinions, work together and pool our wisdom
Li Ka-shing, in a press statement
This followed a relief package worth HK$19.1 billion that was announced on August 15 after the government downgraded its forecast for the city’s annual economic growth to between 0 and 1 per cent. The previous growth estimate had been between 2 to 3 per cent.
The government has warned that the city’s economy would likely plunge into a technical recession in the third quarter, after the preceding quarter dropped 0.4 per cent from January to March. A technical recession is two consecutive quarters of negative growth.
The city’s crucial tourism and retail sectors have been hit especially hard by the protest crisis.
In August, arrivals to Hong Kong plummeted nearly 40 per cent year on year amid the political turmoil triggered by a now-withdrawn extradition bill.
Retail sales in the same month plunged a record 23 per cent compared with the same month last year.
Danny Lau Tat-pong, the honorary chairman of the Hong Kong Small and Medium Enterprises Association, said the new fund would help local businesses manages their cash flow.
If it is linked with the government, then it cannot reach the businesses that really need help
Danny Lau, honorary chairman of Hong Kong Small and Medium Enterprises Association
He said the fund could help companies in the tourism and retail sectors, such as travel agencies and coach operators, as well as factories that handle overseas orders.
Lau said the new fund should be managed by a private-sector plan instead of following the government’s method of delivering relief measures. He suggested the foundation could form a committee to approve funding applications.
“This would be more in the human interest – and faster,” he said. “I hope the procedures for this private fund can be more relaxed. It shouldn’t be linked to the government. If it is linked with the government, then it cannot reach the businesses that really need help.”
A spokeswoman for the Commerce and Economic Development Bureau said: “We learned of the initiative from the media and cannot offer any comment without knowledge of the initiative details.”
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