Hong Kong government pledges funds to boost economy hit by months of unrest

FILE PHOTO: Protesters climb a stairway filled with a makeshift barricade of chairs and other debris at the Hong Kong Polytechnic University (PolyU) in Hong Kong, China - Reuters 

HONG KONG (REUTERS): Hong Kong’s Government pledged HK $ 4 billion ($ 511 million) yesterday in new relief measures to help bolster an economy battered by months of protests that have eroded business confidence in the international financial hub.

The boost brings the government’s total stimulus to HK $ 25 billion ($ 3.2 billion) since this summer to right an economy, which is reeling from sharp drops in tourism and retail sales.

The Chinese-ruled city has been convulsed by nearly six months of anti-Beijing protests that have sometimes turned violent.

It is now grappling with its first recession in a decade and deepening concern that international investors may be growing more skittish.

“During an economic downturn, supporting employment is the number one priority of the government,” Financial Secretary Paul Chan said as he announced the package.

He said the measures were mainly aimed at helping small and medium-sized businesses in order to safeguard jobs. The demonstrations were hurting investor confidence, he told reporters.

The protests were sparked by a controversial and since-withdrawn extradition bill and have swelled into broader calls for greater democratic freedoms.

Those taking part in the pro-democracy demonstrations accuse China of increasingly interfering in freedoms promised to the former British colony when it was returned to Chinese rule in 1997. China denies interfering in Hong Kong’s affairs.

Earlier yesterday, the International Monetary Fund urged the Government to deliver “significantly” more fiscal stimulus to address the downturn and longer-term structural issues such as insufficient housing and income inequality.

Business activity in Hong Kong contracted at the fastest pace in 21 years in November, dragged down by the protests and softening global demand, an IHS Markit survey showed.

Hong Kong is a top shopping destination for Chinese tourists. But the unrest has scared off visitors and hit spending. This week the city recorded its largest-ever retail collapse, with sales dropping 24.3% to HK $ 30.1 billion in October.