As the Covid-19 epidemic has become increasingly severe in various countries around the world, the global economy has been hit hard. Many companies have found themselves trapped in an unprecedented quagmire where they are finding it hard to survive as business, orders and income have slowed or even stopped.
Before the situation completely deteriorates, we should try every means possible to alleviate the liquidity pressure on companies and safeguard the rice bowls of employees. This will also help to stabilize market confidence so we can work together to overcome this acute challenge.
With the impact of social unrest as well as the epidemic in recent months, I have had a number of meetings with the Chief Executive. Members from the Chamber, representatives from the business sector and I made suggestions, including that the Government should provide wage subsidies to employers.
I’m pleased to say that the Administration accepted these suggestions, and meanwhile enhanced various loan guarantee schemes, including raising the loan limit as well as providing concessional interest. The deadline for payment of tax will also now be automatically extended.
I also proposed to the SAR Government that emergency measures should be introduced, after the HKMA communicates with banks, to allow enterprises to repay loans on an interest-only basis for the time being. All banks are required not to impose late charges on relevant borrowers to avoid the risk of breaking the corporate capital chain.
Last month, the HKMA also agreed to lower the regulatory reserves of banks and release a total of HK$200 billion of lending capacity. This should help banks respond to corporate lending needs and reduce the burden on SMEs.
I have been in constant communication with Chamber members as well, who discussed their current situation and shared their policy suggestions. Regarding this issues, I met with the Chief Secretary for Administration and urged the Government to further enhance the relief available to ensure the allocation of anti-epidemic funds is appropriate and balanced.
As the saying goes, “Where there is life, there is hope.” Since we are in the midst of a crisis, the Government must use its reserves to protect the local market, while remaining alert to changes in the global economy to make contingency plans and prepare for the future. I also welcome all members to share their opinions and suggestions by phone or email any time, which I will do my best to pass on to the Government to ensure the voice of the business community is heard.