https://www.wsj.com/articles/hong-k...ests-to-hand-out-billions-in-cash-11582709863
Hong Kong, Hit by Coronavirus and Protests, to Hand Out Billions of Dollars in Cash
As economy reels, an “exceptional measure” is necessary to encourage consumer spending, said Financial Secretary Paul Chan
Hong Kong’s government said it would dole out $15.4 billion in cash payouts and other stimulus in its annual budget in an attempt to resuscitate an economy reeling from the coronavirus epidemic and months of antigovernment protests.
The city will give each of its adult permanent residents 10,000 Hong Kong dollars ($1,284) in cash—a $9 billion combined payout—and slash salaries tax for close to two million workers, Financial Secretary Paul Chan said Wednesday. He also announced tax breaks and financial aid for companies.
“The rapid spread of the novel coronavirus has dealt a severe blow to economic activities and sentiment in Hong Kong,” Mr. Chan said in a budget speech. He said an “exceptional measure” was necessary to encourage consumer spending and ease financial burdens on individuals and domestic businesses.
Hong Kong’s economy contracted 1.2% in 2019, its first annual recession since the global financial crisis a decade earlier. Regular protests that started in the middle of the year and at times escalated into violent clashes between demonstrators and police led to steep drops in tourism and retail sales and saw business events canceled. The U.S.-China trade war also damped import and export volumes and business sentiment in Hong Kong, which acts as a gateway into China.
The city is now facing the prospect of a protracted recession. Mr. Chan said Hong Kong’s economy could contract by as much as 1.5% in real terms in 2020, or grow by 0.5% in an optimistic scenario.
The novel coronavirus, which causes a disease known as Covid-19, was first identified in December in the central Chinese city of Wuhan. It has since spread to many parts of the world, leading countries and cities to impose border controls that have severely curtailed tourism and business travel. There have been more than 80,000 confirmed cases world-wide, of which more than 2,700 people have died, mostly in mainland China.
Hong Kong has so far reported 89 coronavirus cases and two deaths. The city has closed schools, government offices, major tourist attractions and public facilities such as libraries and swimming pools to discourage people from congregating. The city’s Disneyland theme park has been closed since late January, and hotels, restaurants, shopping centers and indoor playgrounds are suffering from steep sales declines. Some have laid off employees to reduce their overhead costs, pushing the unemployment rate in the food-and-beverage services sector to 6.1%, an eight-year high.
Hong Kong, with a population of 7.5 million, is Asia’s biggest and busiest financial center, where many investment banks and companies base their regional headquarters. The $9 billion in cash payouts will go only to Hong Kong permanent residents, including those who live abroad.
Hong Kong, Hit by Coronavirus and Protests, to Hand Out Billions of Dollars in Cash
As economy reels, an “exceptional measure” is necessary to encourage consumer spending, said Financial Secretary Paul Chan
Hong Kong’s government said it would dole out $15.4 billion in cash payouts and other stimulus in its annual budget in an attempt to resuscitate an economy reeling from the coronavirus epidemic and months of antigovernment protests.
The city will give each of its adult permanent residents 10,000 Hong Kong dollars ($1,284) in cash—a $9 billion combined payout—and slash salaries tax for close to two million workers, Financial Secretary Paul Chan said Wednesday. He also announced tax breaks and financial aid for companies.
“The rapid spread of the novel coronavirus has dealt a severe blow to economic activities and sentiment in Hong Kong,” Mr. Chan said in a budget speech. He said an “exceptional measure” was necessary to encourage consumer spending and ease financial burdens on individuals and domestic businesses.
Hong Kong’s economy contracted 1.2% in 2019, its first annual recession since the global financial crisis a decade earlier. Regular protests that started in the middle of the year and at times escalated into violent clashes between demonstrators and police led to steep drops in tourism and retail sales and saw business events canceled. The U.S.-China trade war also damped import and export volumes and business sentiment in Hong Kong, which acts as a gateway into China.
The city is now facing the prospect of a protracted recession. Mr. Chan said Hong Kong’s economy could contract by as much as 1.5% in real terms in 2020, or grow by 0.5% in an optimistic scenario.
The novel coronavirus, which causes a disease known as Covid-19, was first identified in December in the central Chinese city of Wuhan. It has since spread to many parts of the world, leading countries and cities to impose border controls that have severely curtailed tourism and business travel. There have been more than 80,000 confirmed cases world-wide, of which more than 2,700 people have died, mostly in mainland China.
Hong Kong has so far reported 89 coronavirus cases and two deaths. The city has closed schools, government offices, major tourist attractions and public facilities such as libraries and swimming pools to discourage people from congregating. The city’s Disneyland theme park has been closed since late January, and hotels, restaurants, shopping centers and indoor playgrounds are suffering from steep sales declines. Some have laid off employees to reduce their overhead costs, pushing the unemployment rate in the food-and-beverage services sector to 6.1%, an eight-year high.
Hong Kong, with a population of 7.5 million, is Asia’s biggest and busiest financial center, where many investment banks and companies base their regional headquarters. The $9 billion in cash payouts will go only to Hong Kong permanent residents, including those who live abroad.
