Supporting Local Consumption: Hong Kong’s Strategy for Stabilizing the Economy in 2021

Zhitong Finance APP learned that on June 4, Chen Maobo, the Financial Secretary of the Hong Kong Special Administrative Region Government, stated in his blog that supporting local consumption is one of the main strategies for Hong Kong to stabilize the overall local economy in the short to medium term, especially in the first half of this year. After a strong rebound in the first quarter of this year, Hong Kong’s domestic consumption has slowed down slightly in April, and the value of retail sales has further increased to nearly HK$35 billion. pressure. Compared with before the epidemic, the value of retail sales and the revenue of restaurants have recovered to about 90% of the levels in the same period in 2018 and 2019. Although the number of tourists visiting Hong Kong and the capacity of the airport have only recovered to more than 50% before the epidemic, but as the shipping industry actively expands manpower, Hong Kong’s transport capacity and reception capacity are expected to continue to recover, and the number of tourists visiting Hong Kong is expected to gradually recover.

Chen Maobo said that the consumer voucher program and the “Happy Hong Kong” campaign are part of this year’s “Budget” to consolidate the momentum of Hong Kong’s economic recovery. The two cooperate and promote each other. The distribution of consumer coupons has injected about HK$33 billion of spending power into the market, and the “Happy Hong Kong” campaign has created more occasions for consumption through themed activities, and at the same time stimulated the flow of people in the market. These two months are the off-season for the traditional retail industry.

In addition, improvements in the employment situation and income levels of citizens will also help support local demand and stimulate economic growth. Hong Kong’s latest unemployment rate (February-April) has fallen to 3.0%, the lowest level since the third quarter of 2019. Residents’ income also increased in real terms after deducting inflation. The median monthly household income, which reflects the overall household income situation, rose by 2.1% in real terms in the first quarter of this year. When people’s employment and income are stable, the foundation for economic development will be more solid.

As for the asset market, the performance is more complicated. As for the residential property market, with the recovery of the local economy, both transaction activities and residential prices rebounded. In the first four months of this year, the transaction volume of residential properties rebounded to an average monthly level of about 4,600, compared with the same period last year (that is, the first At the peak of the five waves of the epidemic), the number increased by more than 60%. Compared with the end-December of last year, the overall residential price and rental indices rose by 5.8% and 1.5% respectively in the first four months of this year. Hong Kong will continue to work hard to speed up, increase the volume, and increase housing and land supply in an all-round way, in order to respond to the urgent needs of citizens for improving the living environment.

In terms of the stock market, the Hong Kong stock market has performed weakly in recent months. As of last Friday, the Hang Seng Index closed about 4% lower than the end of last year, and the average daily trading volume in the first four months of this year was also 4% lower than last year.

Chen Maobo said that looking forward to the second half of the year, despite the steady progress of the local economic recovery, we should still be alert to uncertain factors and challenges in the external environment. We must continue to pay attention to external risks and variables, have bottom-line thinking and limit thinking, do a good job in risk prevention, coordinate development and security, and ensure the high-quality and sustainable development of Hong Kong’s economy.