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Let’s celebrate the National Day and start a new chapter together

It was the 73rd anniversary of the founding of the People’s Republic of China yesterday. Flags were flying everywhere in Hong Kong. With an upbeat sentiment, the whole city celebrated the great National Day with joy. After attending the flag-raising ceremony and the National Day reception in the morning, I met with a number of grassroots families, including some friends with whom I made dumplings during a district visit, to celebrate the National Day.

While the whole city celebrated the great National Day with joy yesterday, I also invited a number of grassroots families to celebrate together.

A new batch of consumption vouchers were distributed yesterday. About 6.36 million eligible persons got the second voucher. A spending power of about $15 billion had been injected instantly into the retail and catering market. The festive atmosphere during the long weekend of the National Day and Chung Yeung Festival would also boost the consumer sentiment.

The effect of consumption vouchers on stimulating consumption and boosting the economy is remarkable. Taking the first vouchers distributed in August for example – they amounted to some $13 billion – about 70% of the total value of vouchers was used within the first month of disbursement. Out of such value, about 60% was spent on retail transactions, 30% on catering and the other 10% on services. As regards the number of users, over one-third of voucher holders spent their whole voucher value within the first month of distribution.

Although consumption vouchers can bring a stimulus effect to the economy in the short term and help retain confidence, the retail market performance would still be affected by the general economic environment. Since the beginning of this year, the global situation has remained volatile, geopolitical tensions persisted, and supply chain not yet reinstated fully. Heightened inflation levels have propelled major foreign central banks to raise interest rates repeatedly and aggressively. The market is worried that the global economy may enter a recession. This has intensified the risk aversion sentiment, as evident in the pressure endured by the local stock and property markets recently. Lingering external factors and the local epidemic situation have hindered the resumption of local economic activities and consumption; coupled with the high base effect, retail sales value recently announced in August fell slightly by 0.1% year-on-year. On a seasonally adjusted month-to-month comparison, however, the figure had continued to rise. Indeed, consumption vouchers have propped up the weak retail market to a certain extent.

Another policy objective of the Consumption Voucher Scheme is to promote and broaden the use of electronic payment. Since the launch of the Scheme last year, the six stored value platforms have acquired some additional 8 million consumer accounts and 150,000 merchant accounts in total. With more consumers and merchants accepting electronic payment, online retail sales transactions have increased rapidly. In the first eight months of this year, the cumulative online retail sales value reached $20.45 billion, representing an increase of 22% when compared to the same period last year, or an increase of 77% when compared to the same period in 2020. The percentage of online sales among all retail transactions had also increased gradually, from only 5.4% in the same period in 2020 to 9.0% in 2022.

Technological innovations and their wider application are helping various industries to improve their operational efficacy and explore new business models, as well as open up more sale channels and new markets. They also bring in new opportunities for development and create impetus for growth. Faced with a deteriorating external environment and keen market competition, we need to strengthen our support to technological innovations and deepen their application so as to create more room for our economy and enterprises to grow. This is a direction with which we are pressing ahead. We need to facilitate better integration of a capable government and an efficient market, thus fostering diversification of our industries and strengthening the momentum for economic growth.

I attended the flag-raising ceremony and the National Day reception for the 73rd anniversary of the founding of the People’s Republic of China yesterday.

The upcoming 20th National Congress of the Communist Party of China will provide us with important directions for the planning of our future development. The world is undergoing profound changes unseen in a century, and changes of the world, of our times and of history are exhibiting their characteristics more evidently. The challenges and conflicts that we need to confront and resolve have become more complex than ever. The 20th National Congress of the Communist Party of China will be a very important meeting, which will set out the mission and targets, major policy directions and action plans for the development of the Communist Party of China and our country in the next five years or even longer. As President Xi pointed out, “The next five years are crucial as we set out to build China into a modern socialist country in all respects, and doing a good job during this period is of vital importance to achieving the Second Centenary Goal. We must focus our efforts on addressing unbalanced and inadequate development…and work out new approaches and measures for solving our problems.” Firm support of our country is very important for Hong Kong’s continued success in the future. That is why we need to better understand the Party’s and country’s planning for the future. By holding on to the essential elements of success and finding the right direction; and by more quickly and comprehensively integrating into the national development, thus serving the needs of the country more earnestly, we will certainly create a brighter future for ourselves.

October 2, 2022