I’m not sure you can call it “good” news, but Hong Kong’s exports contracted less than expected in November, even as shipments fell for a 13th consecutive month.
The decline was just 1.4% last month, the government said Monday. That’s far better than the 6.2% contraction consensus expected.
Imports fell 5.8%, also a shallower drop than 7 economists polled by Bloomberg were looking for.
Still, the 13-month slide in exports is a reminder of just how dire the situation is in the city, where protests continue and the economy is poised for another quarter of contraction.
Over the weekend, Sing Tao Daily said inbound visitors dropped 53% over the Christmas period, from December 21 to December 25. The number of tour groups from the mainland fell 90%, the paper said.
Protesters of course targeted malls on Christmas Day and Christmas Eve, prompting clashes with police. “It was clear even in November, when protesters set a Christmas tree on fire in the busy Festival Walk mall, that this season was going to be brutal for Hong Kong retailers – the mall will be closed until some time in the first quarter next year, according to its owner Mapletree North Asia Commercial Trust”, the Financial Times notes, in a somber piece.
Retail sales and the city’s PMI have obviously collapsed.
If you were worried about the bankers, you should be. Their bonuses are set to be the lowest in a decade this year, SCMP said Sunday. “The trade war and the protests have dampened market sentiment, while stock market turnover fell 20% in the first 11 months of the year, slashing the commission income of local brokers”, the paper wrote.
“The brokers… have no favourable conditions to offer salary increases or bonuses”, Gordon Tsui Luen-on, chairman of the Hong Kong Securities Association, remarked.
If you’re looking to get a sense of where things stand, Financial Secretary Paul Chan published a blog post over the weekend that sums it up. You can read it below, presented without further comment.
Via Paul Chan
In 2019, our generations of Hong Kong people have experienced an unprecedented severe test, from diversified opinions to one another, from inclusive differences to mutual hostility, from obedience to violent destruction. Over the past two hundred days, this place suddenly became so strange and appalling. Thugs use violence as a means to “private” and prevent them from breaking the law or dissidents, maliciously harassing shops, malls, banks and even the MTR, destroying private property and public property.
These historical clips have caused many Hong Kong people to feel worried and desperate, and because they are worried about their own safety, as well as their relatives and friends, they have reduced their travels and have no desire to spend. In October, Hong Kong ’s retail sales volume plummeted by 26%, the biggest monthly drop in history, and November was not much better. These scenes also scare foreign business or sightseeing travelers, and even in traditional peak seasons such as Christmas Eve and Christmas, the number of arrivals has decreased by about half. Hong Kong’s economy has entered a recession, and a large number of grassroots wage earners bear the brunt of it. Their income has decreased and they are even facing unemployment. The unemployment rate in the catering service industry has risen to more than 6%, the highest in more than eight years. Two thirds of the year-on-year negative growth of 2.9% in Hong Kong was caused by these violent shocks and social unrest. Although the statistics for the fourth quarter will be released early next year, judging from the situation in these months, it is unavoidable to continue to show negative growth. This also made the government accounts “see the red” for the first time in 15 years, which means that the government’s flexibility in mobilizing financial resources will decline in the economic downturn.
The turmoil of the past six months has severely hit the slowing Hong Kong economy. And the bigger impact is in people’s hearts. The mob threatened the civilians’ personal safety and freedom of expression with the primitive violence of “rebellion against us”, trampled on the freedom and rights of others to create a bluff, created “black terror”, and damaged the rule of law. The core spirit of the law as a social contract for the settlement of disputes is to prohibit the “law of the jungle” from bullying and bullying, so that society can be civilized and rational. In fact, no matter what the motive is declared, resorting to violence is either not or illegal. This is the most basic point.
With two days left, 2019 is a thing of the past. Hong Kong today cannot afford more violence and hatred. If disregard and dissatisfaction, turn a blind eye to the rampant, treacherous, and even brutal acts of thugs, this kind of acquiescence and laissez-faire is the culprit that really ruins Hong Kong. Hong Kong may not be as good as it should be, but it is by no means as bad as some people describe it. The turmoil that has plagued Hong Kong for seven months still continues. Many people are asking in their hearts, when can we return to peace? What hope can we have for 2020?
Hong Kong currently faces several pressing issues: violent coercion (including hurting, destroying, malicious nuisance and bottom line), social controversy and economic recession. The three have a mutually influential relationship, but must be addressed separately.
First of all, we must prevent all acts of coercion and destruction. If the destruction can achieve the purpose, who else is willing to build? Maybe some people hope that society will be chaotic enough to accumulate chips to promote social movements. But for small citizens, only social stability can find space for life and development.
As for social disputes, it is necessary to seek a way out through dialogue, mutual understanding, and actively facing the future. Opposition and swearing are just emotional releases, they will only push Hong Kong to the forefront, and only bring hatred and despair.
The economic recession caused by internal and external difficulties requires us to work together and co-ordinate. In terms of the external environment, trade protectionism, unilateralism, and the geopolitical situation will still dominate the external situation next year. On the local front, whether the links such as consumption and tourism can be improved as soon as possible depends on whether the internal social situation in Hong Kong can return to stability as soon as possible. If the business environment continues to be difficult and the unemployment rate is rising, it will further crack down on the weak consumer market and increase the living pressure of wage earners. In order to alleviate the “pain” caused by the economic downturn to SMEs and citizens, the budget released in February will focus on “supporting enterprises, protecting employment, boosting the economy, and alleviating the plight of the people.”
As for the long-standing deep-seated economic and social contradictions, such as land and housing issues, poverty, etc., which involve resource allocation and social justice, it is both a people’s livelihood issue and a political issue, which must be dealt with in a specific and rational and careful manner.
Fortunately, the core competitiveness of Hong Kong’s financial markets has been maintained. The banking system, the securities market, the linked exchange rate system, and the free flow of funds into and out of the country have all maintained sound and orderly operations. The Hang Seng Index is currently at about 28,000 points, about 3,000 points higher than the beginning of the year. Since the beginning of this year, the IPO of Hong Kong’s securities market has exceeded 280 billion yuan, once again the world’s crown. This is the seventh time in the past 11 years. Development continues to provide support.
As we walk through 2019, whether we are carrying fear, anxiety, anger, or confusion, we can choose to embrace the future with hope in the 2020s. Over the past century or so, Hong Kong has experienced many storms and waves, and each time we can overcome difficulties, turn crisis into opportunity, and become more competitive and successful. I am convinced that, as long as everyone actively faces, summarizes experiences, and makes concerted efforts, we can certainly overcome the current difficulties and Hong Kong can reach another peak.
December 29, 2019
