The year 2020 will forever be known as the year a global pandemic blindsided communities and upended economies. However, now that we are in its fourth quarter, we must chart a way towards recovery to ensure that 2021 is a year of growth and prosperity.
When Covid-19 hit Hong Kong, the Government came to the aid of businesses by launching the Employment Support Scheme. On October 14, the Chief Executive is expected to reveal a more comprehensive vision for reviving the economy.
Unfortunately, we will need to climb up from a very low base. Since the city tightened its border to control infection rates, tourist arrivals have been down 99.9% year-on-year for several months. Our retail sector has also suffered a 30% loss in sales compared to last year. But our businesses need tourists and domestic consumers to survive, and many enterprises are hanging on by a thread.
Now social distancing restrictions are being lifted, allowing local businesses to welcome the return of customers and much-needed cash flow. This gradual recovery to business-as-usual is steadily improving. However, it is crucial that we create positive momentum so that we regain lost ground as quickly as possible. To achieve real economic gains, we must gradually invite more cross-border activity and enable more fluid mobility between Hong Kong, Mainland China and other key markets in Asia. This is because our businesses most need customers.
This year, the Government expects Hong Kong’s GDP to contract sharply from between 6% and 8% but it also anticipates accelerated growth next year. While this may seem optimistic, the city’s history is one of resilience. Over the decades, we have overcome financial crises, periods of unrest and similar health scares to Covid like SARS.
Despite this challenging climate, Hong Kong remains an attractive hub to conduct business among international corporates. Our Chamber members tell us that business leaders from overseas consistently value Hong Kong’s ease of doing business, regulatory environment, and its proximity to Mainland China, especially to the rest of the Greater Bay Area.
As we move past this crisis, we should look to our neighbours in the GBA as fertile ground for our own growth. Their rapid success and rising affluence means there are untapped opportunities to provide wealth management and professional services. Hong Kong businesses should look to expand their operations in the GBA and make the most of our collective capabilities including high-tech manufacturing, internationally connected supply chains and more integrated financing.
The Chamber will continue to reinforce Hong Kong’s unique position with governments, businesses and investors. And together we will emerge from this crisis to embrace stronger growth and prosperity.