U.S. President Donald Trump signed an executive order in July to cancel Hong Kong’s status as an independent customs territory. Although the value of local exports to the U.S. is not significant, the SAR Government should continue to communicate with affected sectors to understand their situation and safeguard the interests of Hong Kong.
Meanwhile, the third wave of the pandemic shows that Covid-19 continues to be a serious threat. We agree that the Government should put public health as top priority and work to cut off the transmission chains as quickly as possible. But the impact on businesses means that more support measures should be rolled out to give room for SMEs to survive.
With virtually no tourists, and local people staying home, physical business and trade activities have come to a halt. To help affected enterprises I urge the Government to launch a third round of the Anti-epidemic Fund, including a special subsidy for six months to cover rent and rates, as well as a waiver on utilities charges.
In fact, the burden of rent is the biggest challenge currently faced by businesses. As Hong Kong is a free market economy, the Government cannot force landlords to reduce rents. However, there are other means – such as tax and rates concessions – that could be used to encourage landlords to cut rents. Alternatively, the Government could directly subsidize tenants.
To help businesses with mortgages, I previously proposed to the Hong Kong Monetary Authority (HKMA) that a principal payment holiday scheme should be introduced. The roll-out of this scheme has not only reduced liquidity pressure on companies, but also helped maintain the stability of Hong Kong’s banking system. As the scheme will expire at the end of October, I suggested that the HKMA and the banking sector extend this arrangement for a further six months, to tide businesses over.
The 100% Guarantee Loan Scheme has also been well received by businesses, especially SMEs. Given the ongoing uncertainty, I hope the Government will enhance this scheme – for example by increasing the maximum loan amount per enterprise from $4 million to $8 million – to help ease businesses’ liquidity and cash flow problems.
As Hong Kong will continue to face hardships in the near future, I hope the Government will think out of the box when launching further anti-epidemic measures. Interdepartmental coordination and cooperation should also be strengthened. The Government, the business community and general public must all join hands to get through these difficult times.