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Progress ahead steadily

Since mid-September, we have entered a new phase in the two-front battle of controlling the epidemic and restoring the economy. The successful conclusion of the 14-day Universal Community Testing Programme have identified some of the asymptomatic patients in the community, which not only helped contain the spread of the virus, but also offered an useful reference for risk assessment by providing a “snapshot” of the general infection situation in the community. Meanwhile, the daily number of new confirmed cases stayed at about six on average over the past week, with zero new cases recorded in a single day. Although the epidemic appeared to be subsiding, it is worrying that this wave of outbreak still cannot end as hidden chains of infection continue to exist in the community.

The epidemic situation has been volatile since the beginning of this year. Various premises have been repeatedly required to suspend operation for the sake of epidemic control, resulting in a severe blow to the related businesses and employees. According to the latest statistics, the unemployment rate stood at 6.1% in the period of June to August 2020, the same as that in May to July 2020. The number of unemployed persons increased by around 5 800 to almost 250 000, doubling that of Q4 last year, amongst which a quarter are employees from the retail, accommodation and food services sectors. Take the food services sector as an example, its unemployment rate has been about 14%-15% in the past four surveying periods, much higher than the overall unemployment rate of 6.1%. The underemployment rate of the sector climbed up again from 6.1% in May to July to 8.3% in June to August, with around 20 000 underemployed persons. This reflects the tremendous pressure imposed by the epidemic on many sectors as well as the overall economy.

Effective control of the epidemic is the pre-requisite for restarting the economy, yet efforts in fighting against the virus and stabilising the economy are equally important. We need to take into consideration both aspects in deliberating related strategies and measures, with a view to addressing people’s needs on health, family, economy and daily lives. Given the easing situation, some social restriction measures have been adjusted over the past few weeks, such as the slight relaxation in gathering and the seating cap per table in restaurants, extension of business hours for restaurants’ dine-in services, and the reopening of those temporarily suspended premises under certain requirements, such as swimming pools, pubs and karaoke establishments.

Last Friday, when some of the restriction measures were further relaxed to allow the reopening of various premises, I visited one of those reopened premises to learn more about their operation.

I went out for a walk few days ago and noticed that restaurants had seen an improvement in business. Customers were also returning to reopened karaoke establishment. Staff working there told me that they are happy to do business again although normal operation is still not yet possible due to certain restrictions. They wish that the epidemic situation could be further improved so that their business and income can resume normal.

I believe seeing continuous improvement in the epidemic situation is our common wish. This enables us to return to our daily lives and fuels economic recovery. However, as the epidemic has yet been completely brought under control, we need to take a gradual and cautious approach in relaxing the restriction measures. There is still a long way to go before our economic activities can be fully resumed. All of us need to remain highly vigilant and maintain good personal hygiene.

Many health experts have indicated that the epidemic could hardly be tamed before the discovery of effective vaccine and its mass vaccination. And there may be a more severe wave of the epidemic to appear in winter. To prepare for that, we will continue to enhance our anti-epidemic capability in various aspects. At the same time, we will adopt a focused approach in supporting targeted sectors and individuals directly affected by the Government’s anti-epidemic measures or hard-hit by the epidemic given our finite public resources.

Last week, we announced the measures under the third round of the Anti-epidemic Fund and other related anti-epidemic and support measures, which accounted for some $24 billion in total. Apart from the procurement of vaccine, the Government will provide assistance to the sectors and individuals whose income are directly affected by the Government’s anti-epidemic measures or hard-hit by the epidemic. We will also increase the exemption ceiling of the rates concession to non-domestic properties, extend the waiver of water and sewage charges payable by non-domestic households, extend the rental concessions/waivers for government premises and short-term tenancies, as well as extend the waivers of 27 groups of government fees and charges. In addition, we have invited Hong Kong Housing Authority, Hong Kong Housing Society, Airport Authority Hong Kong, Hong Kong Science Park and Cyberport to provide rental concessions for their tenants. Some of them have already announced the details of the related measures.

The measures under the three rounds of Anti-epidemic Fund, together with the support measures under the Budget, involve over $300 billion in total, which is about 11% of GDP and is expected to have a supporting effect of slightly more than 5 percentage points of GDP on our economy. The consolidated deficit for the current financial year (2020-21) is expected to increase to over $300 billion, and our fiscal reserves will be reduced to around $800 billion, equivalent to around 12-13 months of government expenditure, close to the level after the SARS epidemic in 2003.

The global economy has been hard-hit by the pandemic and the tensions between China and the US continue to rise. Given the uncertainties and risks in the external economic environment, our road to economic recovery is paved with challenges. During a deep economic recession, the Government has to put forward counter-cyclical measures to support the economy. Yet as public resources are finite, we have to exercise fiscal prudence and preserve our fiscal strength, with a view to coping with known and unforeseen needs, as well as maintaining Hong Kong’s financial stability.

September 20, 2020