Hong Kong offers $2.4B sweeteners as economy stalls amid protests
Hong Kong’s government unveiled HK$19.1 billion (US$2.44 billion) worth of economic relief measures and downgraded its growth forecasts on Thursday as the international hub reels from simmering pro-democracy protests and the US-China trade war.
Last week city leader Carrie Lam warned that 10-weeks of anti-government protests were hitting businesses like a “tsunami”.
On Thursday, financial chief Paul Chan predicted the city’s economy would grow by a miserly zero to one percent this year, the worst rate since 2009 after the global crash hit.
But as he announced a raft of sweeteners in a surprise “mini-budget”, he denied the move was linked to the roiling unrest.
“The measures that we have just announced… trying to tackle the current economic difficulties and the coming economic headwinds, is not related to the political difficulties that we are facing,” Chan told reporters.
Instead, he said, the primary headwinds remained ongoing trade tensions between Washington and Beijing — two major markets for Hong Kong — and the possible impact of Brexit.
“Based on the latest developments and assessments on the outlook, the Hong Kong economy will continue to face an austere environment for the rest of the year,” he said.
Nonetheless, the sweeteners seemed to be aimed at winning over support from moderate Hong Kongers as the city reels from the protests.
The measures included financial breaks for small businesses, more generous student subsidies and goodies for low-income households.
Ten weeks of unprecedented rallies, demonstrations and occupations in Hong Kong have seen millions of people take to the streets in the biggest challenge to China’s rule of the semi-autonomous city since its 1997 handover from Britain.
The social and political unrest was triggered by a controversial bill which would have allowed extraditions to mainland China, but has evolved into a call for wider democratic reforms and a halt to sliding freedoms.
The retail and tourism sectors have been especially hit by the drop in arriving visitors to the city, but the property market remains strong.
At a “citizens press conference” on Thursday, one protest group blamed the city’s economic woes on the local leaders who they accused of undermining the city’s business appeal by kowtowing to Beijing.