Mainland can help HK get over technical recession: experts
By Li Qingqing Source:Global Times Published: 2019/11/1 0:03:40
Hong Kong has fallen into a technical recession as its third quarter GDP in real terms decreased by 2.9 percent year-on-year and by 3.2 percent compared with the second quarter, a situation that Chinese experts said could be addressed through restoring order and engaging in more cooperation with the mainland.
The 2.9 percent year-on-year decrease in real terms in the third quarter marked the first year-on-year contraction for an individual quarter since the financial crisis of 2009 and it was also much weaker than the mild growth of 0.6 percent and 0.4 percent in the first and second quarters respectively, a Hong Kong government spokesperson was quoted as saying in a press release on Thursday.
On a seasonally adjusted quarter-to-quarter comparison, the fall in real GDP widened to 3.2 percent in the third quarter from 0.5 percent in the preceding quarter, the press release said. Two consecutive quarters of negative quarter-to-quarter GDP growth means that Hong Kong has already fallen into a technical recession as expected.
"The decline in GDP was attributable to the weak performance in both domestic and external demand," the press release read.
HSBC and Standard Chartered, two of Hong Kong's largest banks, cut their key benchmark rates in Hong Kong on Thursday.
Chinese analysts asserted that violence and riots caused the recession and cooperation with the mainland could help Hong Kong ease its economic downward pressure.
"Economic cooperation with the mainland could be a stimulus for Hong Kong's declining economy," He Liangliang, a commentator on the Hong Kong-based Phoenix TV, told the Global Times on Thursday.
"Hong Kong's economic development at different stages has been closely related to the mainland. The central government has offered great support to Hong Kong, especially including Hong Kong in the plan for the Guangdong-Hong Kong-Macao Greater Bay Area," he said.
During a press conference in Hong Kong on Tuesday, Hong Kong Chief Executive Carrie Lam Cheng Yuet-ngor warned that Hong Kong was likely to record negative growth for the full year of 2019.
Lam said Tuesday that Hong Kong has so far injected more than HK$20 billion ($2.6 billion) to support the economy including the transport, tourism and retail sectors.
She said governmental support for enterprises and employment are only temporary solutions, and Hong Kong can only restore peace by stopping the violence as soon as possible.
"To tackle the technical recession, there needs to be a normal order for economic development. But currently, different scales of protests and riots happen almost every day in Hong Kong," said He.
"Even though there are structural problems in Hong Kong's economy, a peaceful and normal social environment is still the priority for the city's economic development," He said.
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