Hong Kong suffered its worst quarterly contraction since modern records began, official figures showed Monday, as the coronavirus outbreak hammered an economy already mired in recession from political unrest and trade war woes.
The financial hub is now experiencing its third-straight quarter of negative growth — its longest financial downturn since the aftermath of the 2008 global financial crash.
Months of debilitating street protests and the tit-for-tat tariff battle between Washington and Beijing had weighed on the local economy for months before the pandemic helped push the city deeper into recession.
Advance figures released Monday showed an 8.9 percent on-year contraction in the first quarter — the worst decline since the government began compiling data in 1974.
A bigger fall than during the Asian financial crisis in 1998
The result was a bigger fall than the 8.3 percent recorded during the Asian financial crisis in 1998 and the 7.8 percent seen in early 2009.
“Faced with a collapse in global demand, Hong Kong’s small, open economy is taking a severe hit,” Bloomberg Intelligence economist Qian Wan said in a note to clients ahead of the results.
The figures were worse than most projections, even though the city has made impressive headway against the coronavirus outbreak.
Despite its proximity and links with the Chinese mainland, confirmed infections have been kept to around 1,000 with just six deaths.
The financial hub has managed to largely end local transmissions of the disease, with almost all new cases coming from people returning to the city from overseas who are quickly quarantined.
Officials are beginning to ease some social distancing measures, in a move that will boost the local economy.
But in an international finance hub so dependent on the rest of the world, plenty of headwinds remain as the coronavirus continues to wreak economic chaos elsewhere.
“Even if there is improvement, it will be gradual and small,” said financial secretary Paul Chan, who estimates the economy will contract between four to seven percent this year.
There is also little sign of an end to the political uncertainty hanging over Hong Kong in the aftermath of last year’s civil unrest.
Despite vowing to heal divides at the start of the year, the city’s government has not unveiled any policies aimed at reconciliation, while Beijing has ramped up its rhetoric against the local pro-democracy movement.
Protesters being prosecuted
There has also been little mood for compromise among protesters who largely organise online and the few figures from the movement with a public profile are now being prosecuted.
As a result, political tensions are rising just as the city moves towards ending some anti-virus movement restrictions.
In the last fortnight small protests have begun bubbling up again after four months of comparative clam imposed by the pandemic.
More global economic damage from the virus and a resurgence of local unrest would both result in “major downside risks” to Hong Kong’s economy, said Oxford Economics senior economist Tommy Wu.
Hong Kong’s US-Bound Exports to be Labeled ‘Made in China’
Goods produced in Hong Kong and exported to the US must be “marked to indicate that their origin is China”, according to a notice put out by US Customs and Border Protection (CBP) on August 11, 2020.
Hong Kong : no journalist in the world is free from China’s violent retribution
The new national security legislation China is imposing on Hong Kong could be used not only against journalists operating in Asia’s main financial hub, but against every journalist in the world says RSF
Reporters Without Borders (RSF) urges democracies to do everything in their power to compel Beijing to withdraw the law that allows it to charge any journalist writing on Hong Kong of endangering national security, an accusation that could result in life imprisonment or even the death penalty if tried in China.(more…)
Subscribe via Email
How the COVID-19 situation may affect Thailand’s export sector
Thailand's export sector could face damage of 200-300 billion baht if the situation cannot be brought under control within six...
Thai baht becoming the region’s worst-hit currency in COVID pandemic
According to data from its tourism ministry as well as the World Bank, Thailand had only a little over 34,000...
Asia’s slow rate of vaccination is a thorn in the region’s economic recovery
Southeast Asia has been hit badly. Daily infections for Indonesia, Thailand, Vietnam are at their worst, on a seven-day moving...
TAT expects 850 billion baht ($25.7 bln) in tourism revenue after successful reopening
The Tourism Authority of Thailand (TAT) has set this year’s revenue target at 850 billion baht, 300 billion of which...
Download 1xBet mobile and play all over the world
Placing profitable bets or playing in a casino is now possible comfortably even without being tied to a computer. It...