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Despite all the challenges, 2019 is coming to its end. Same as the past years, my colleagues and I have been gearing up for the preparation of the upcoming Budget to be announced in end February next year. The Budget public consultation was officially launched last Monday. We sincerely invite members of the community to express their views so that our Budget can meet the needs of the society. This year, we have an ambassador in the promotional video: a bee with a pair of glasses and a tie. His duty is to collect opinions from the community, assist us in drafting the Budget and make preparation for economic downturn. Another message is that, through concerted efforts, together we can build a better Hong Kong.

The economy of Hong Kong is facing a complex and volatile external environment and conflicting and unsafe local condition. A shadow looms over our economic prospects and the outlook is full of challenges. Economic outlook remains gloomy, affecting both citizens and enterprises. We shall continue to "support enterprises and safeguard jobs" in the budget. In the light of the economic downturn and the rising unemployment rate, we will also aim to "stimulate the economy and smoothen livelihoods".

The China-US trade conflict has been the main cause of uncertainty for the global economy in the past one year or so. Recently, the two sides have reached the phase one deal of the trade agreement, bringing positive signal to the global market. While this is certainly a good news, yet taking into account the rise of unilateralism in the US and its suppression of China’s development in various arenas including science and technology, we expect that the there will be ups and downs in the China-US relation for some time. This will bring volatility to the global economy and financial markets, which we have to closely monitor. And coupled with the external geopolitical changes, whether the global economy can accelerate its growth in the coming year is still uncertain.

As for Hong Kong, internal economic pressure remains high. The social turmoil and violent attacks that have lasted for half a year severely damaged the retail, catering, tourism and transportation sectors, and led to drop in local consumption. The impact also spilled over to other sectors such as media and advertising due to cut in promotional budget by companies, leading to reduced employee income. And because of the persistent social unrest, some large-scale trade fairs and events, business conferences and exhibitions, sports events and entertainment performances were cancelled. Many companies and employees are worried about the current situation and prospects of Hong Kong.

The four rounds of relief measures announced since August aimed at alleviating the pressure on citizens and businesses. The economy is currently going downhill. If the confidence of investors or the foundation of Hong Kong were weakened, any administrative means can only serve as “painkillers” but would not be able to stop the deterioration of the economy.

What is more worrying is that, if the global economy grows faster than expected next year, but Hong Kong’s social situation does not show improvement, then we can expect that some international investors who originally planned to come to Hong Kong for investment and business expansion may lose their patience on Hong Kong’s recovery. They may choose other cities in the region or the Mainland for development, which will pose a long-term adverse impact on Hong Kong. In addition, hosting high value-added activities such as large-scale international conferences, exhibitions and events has all along been one of the strengths of Hong Kong. We have been working hard in the past years to consolidate our advantages in this regard. If the events are relocated to other cities due to social unrest in Hong Kong, we will not only lose the potential gains of the past six months or the next year, but also bear the risk that they will go and never return as one can expect that the new host cities will offer their best to keep the events. In 2020, there will be many enterprises holding large-scale, representative and commemorative events, and Hong Kong must not miss the boat.

We must work together to restore order and calmness of the society and allow citizens and businesses to live and operate normally. Last week, I took a walk in the annual Hong Kong Brands and Product Expo in the Victoria Park to support this some 80-year-old local sales event. The atmosphere was lively that day, and I bought quite some snacks, accessories and handcrafts from social enterprises to support local businesses.

As we can see, once the violence and destruction are stopped, the streets has quickly become vibrant again. In the past two weeks, many shops and restaurants said that businesses have improved, slightly alleviating the suffocating operating pressure. The Chief Executive and all Principal Officials are working hard to engage in dialogues with all sectors of the community. Hong Kong is our home. No matter what differences we have, we can talk, communicate and discuss together to find a way out. Any violent and aggressive approach will only make things more difficult. Hong Kong needs everyone to work together to get back on the right track and relaunch again.

December 15, 2019