The Hong Kong economy, which is already in recession due to a double whammy of the Sino-U.S. trade war and social unrest, is now being buffeted by coronavirus-related disruptions. Some have compared the economic impact of the coronavirus outbreak to that of SARS in 2003, when Hong Kong was badly hit.

Under the so-called “phase one” trade deal between Mainland China and the United States, China has pledged to increase imports from the U.S. by at least US$200 billion above 2017 levels over the next two years, and enhance intellectual property protection.

Ursula von der Leyen, Germany’s former defence minister, officially took office as President of the E.U. Commission on 1 December, succeeding Jean-Claude Juncker.

While the official Q3 GDP data for Hong Kong will not be officially released until tomorrow (31 October), Financial Secretary Paul Chan has already said in his blog that the city’s economy continued to contract in the third quarter. This confirms that Hong Kong has technically entered a recession, which is defined as two consecutive quarterly contractions. In Q2, real GDP contracted by 0.4% on a quarter-on-quarter basis.

Recent data seems to indicate that the Chinese economy is facing increased downward pressure. Industrial production expanded 4.4% year-on-year in August, the slowest pace since February 2002. Growth in retail sales and investment have also edged down, reinforcing the belief that Beijing may soon move more boldly to meet the economic growth target of 6%-6.5% set for this year.

Few people would deny that these are extraordinary times for Hong Kong. Rarely have retailers in the city had such a cheerless summer. In June, total retail sales were down 6.7% year-on-year, marking the fifth consecutive month of decline (Figure 1). The value of sales of jewellery, watches and clocks, and valuable gifts declined by 17.1%, the steepest slide since August 2016.

The difference between 10-year and 3-month U.S. Treasury yields has narrowed since the start of this month (Figure 1), amid hopes that the Federal Reserve will reduce its target federal fund rate at its next meeting on 30-31 July. For economy watchers, it tells them something about the outlook of the U.S. economy.

Thanks to the opening of the Hong Kong section of the Express Rail Link (XRL) and the Hong Kong-Zhuhai-Macao Bridge in September and October 2018, total visitor arrivals to Hong Kong have continued to grow this year.

Facing a gradually ageing population (Figure 1), Hong Kong’s total labour force is expected to reach a plateau during 2019 to 2022, according to a projection by the Census and Statistics Department.