– Paul Chan says local economy should grow again this year, but there are uncertainties on how strong and widespread recovery will be

– Labour chief Law Chi-kwong says the 17-year high jobless rate is less likely to worsen further

Published & Updated by SCMP : 23 Mar 2021

 

Hong Kong’s economic activities will rebound more steadily and comprehensively in the latter half of this year if the Covid-19 vaccination scheme becomes successful, the finance chief has said.

Financial Secretary Paul Chan Mo-po on Tuesday said the local economy should grow this year, but added there were uncertainties on how strong and widespread the recovery could be.

As mainland China recorded robust economic growth and other major foreign economies regained their momentum, Chan expected Hong Kong to benefit from the export of goods.

He said the export of services could improve too, but the pace of recovery would depend on the progress in reopening the borders. All but three of the city’s checkpoints have been closed for more than a year.

 

“Domestically, if the vaccination scheme can yield the expected results, and we see an easing pandemic, local economic activities could recover more steadily and comprehensively in the second half of this year,” he said in an online forum.

Last month, Chan predicted Hong Kong’s economy would grow between 3.5 and 5.5 per cent in 2021 over last year, after suffering a 6.1 per cent slump – the biggest year-on-year drop on record.

According to the latest figures, about 379,600 residents aged 16 and above – or roughly 5.8 per cent of Hongkongers – have been vaccinated. The public has proved somewhat skittish over taking the coronavirus jabs following several deaths among the recipients – most with chronic illnesses.

On Tuesday, the finance chief expressed hopes that 2021 would be a year of recovery, but he said Hong Kong would need to pay attention to relations between China and the United States under a new American administration and emerging geopolitical scenarios.

“If Sino-US relations ease, I estimate global trade and commerce activities can further speed up,” he said.

 

Sparring in front of the cameras, US Secretary of State Antony Blinken told his Chinese counterpart that Washington would address its “deep concerns” over Xinjiang, Hong Kong and Taiwan. China’s top diplomat Yang Jiechi hit back, criticising the US for what he said was its struggling democracy and poor treatment of minorities, and over its foreign and trade policies.

On the online forum, meanwhile, Hong Kong General Chamber of Commerce CEO George Leung Siu-kay said the coronavirus crisis had irreversibly changed the business environment.

Leung said digitalisation would be crucial for the survival of companies as it could help them save rent and manpower costs.

Meanwhile, labour chief Law Chi-kwong said the chances of a further rise in the 17-year-high unemployment rate would be relatively low, adding much would depend on whether the health crisis was under control and the city’s measures to prevent the pandemic worked well.

Hong Kong’s jobless rate rose to 7.2 per cent between December and February, the highest since 2004.

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