Comment | With Hong Kong's economy in shambles, it is time to face a new reality

On December 23, over the Christmas weekend, 435,661 passengers left Hong Kong for the mainland, 2½ times more than the 161,789 who arrived from the North. Similarly, on December 30, 299,713 people visited the North, significantly more than the 151,428 visitors from the South.

Northbound traffic has become more dangerous, the government said. Night vibes Hong KongCampaign – Night markets in various districts – to encourage local consumption and tourism spending. However, despite the best efforts of the authorities, the contribution of low-level economic activities to GDP remains low.

The government cannot be faulted for trying hard to revive nightlife and domestic consumption, but understanding what this unstoppable trend is all about is crucial. It shows that Hong Kong's low-end consumer services are losing out to the mainland due to a strong local currency, high business costs and labor shortages.

It also shows that Hong Kongers Thrown away Their old concerns about unsafe food, fake products and poor law and order in the landscape have also given way to better value for goods and services there. And beyond the borders Road And Train Scheduled as part of the links Northern Metropolis As development progresses, more Hong Kongers will want to retire on the mainland or commute to Hong Kong for daily work.

The government needs to take a long view of what kind of city Hong Kong will become in 10 to 20 years. Could it be like London or New York where only high earners live in expensive urban areas and low income earners or retirees settle in nearby suburbs?

The integration of Hong Kongers and their mainlanders is an irreversible process underway, despite occasional counter-accusations. Discrimination Or the poor service of Internet users on both sides of the Shenzhen River.
To retain Hong Kong's advantage Greater Bay Area, the government should develop a population policy to attract and retain the talent needed for the city to maintain its position as a global business and financial center. Those who choose to live in Guangdong and other parts of the mainland must make arrangements to live more smoothly and comfortably.

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In terms of the city's finances, Hong Kong has run a fiscal deficit in every fiscal year since 2019-20. There was a fiscal deficit in the first eight months of the 2023-24 financial year HK$164.1 billion.

Some believe deficits are less of a concern as government spending polishes the economy out of recession and investments in technology and innovation boost Hong Kong's long-term future. However, the government should provide the public with an explanation as to whether the current deficit is temporary or structural and a timetable for gradually reducing the fiscal deficit.

Stock markets are the most visible barometers of economic well-being. The continued decline undermines confidence in Hong Kong's ability to regain its luster as one of the world's leading financial centers. Low ratings deter interest Initial Public Offerings, which curbs demand for professional and business services related to public listings, mergers and acquisitions. A Reduction in stamp duty Stock transactions are not going well enough.

The government should review its investment strategy and ask the Financial Services Authority to allocate a small percentage of funds under its responsibility to buy good quality stocks listed on the Hong Kong exchange and use more Hong Kong asset managers. Only such decisive moves by the government can boost confidence and stave off recession.

Likewise, the „new residence stamp duty” and „dual stamp duty” for non-Hong Kong permanent residents should be abolished. They were introduced 10 years ago. Chief Executive Leung Chun-ying As „demand management” activities.
Now the problem is not lack of supply, but declining demand. The demand from the market is very weak, the development bureau has Not provided Residential and commercial land to be auctioned in the first quarter of this year.
Although Hong Kongers will not blame the property tycoons” Dominance of property”, the drying up of revenue from land sales and premium changes – premiums paid by developers for land use change – has severely affected government revenue and has had a ripple effect in many related sectors. Further declines could put the banking system under pressure.

There is no need for the government to stick to outdated measures. It should remove all remaining stamp duty on property transactions and review its investment strategy to increase confidence and investment returns.

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Regina Ip Lau Suk-Yee Executive Committee Convener, a lawmaker and chairwoman of the New People's Party

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