Newly released bankruptcy figures in Hong Kong mirror the city's further economic recovery in response to the financial crisis in the fall of 2008. The number of bankruptcy petitions and court orders this March fell substantially on a year-to-year basis, although they almost doubled compared to February due to the holiday effect.

According to data released by the Official Receiver's Office Friday, bankruptcy petitions filed by individual debtors in March 2010 decreased 50 percent, from 1,872 a year ago to 935, while bankruptcy orders issued by the courts totaled 957, down 44 percent from the year earlier.

Total bankruptcy petitions and court orders in the first quarter this year amounted to 2,426 and 2,552, down 47 percent and 39 percent, respectively, from the same period in 2009.

Billy Mak, associate professor of finance and decision sciences at Hong Kong Baptist University, said the economy's picking up has eased the hard times for individuals and private enterprises in the city. He also expects the situation to further improve over time.

"If the city's economy continues warming up in the following months, the data are likely to roll back further, but it won't be substantial, since there are always business failures out there in any economic circumstances," said Mak.

Compared to February's data, both petitions and orders in March increased more than 40 percent. Mak said the Chinese New Year is responsible for the low base in February.

The statistics also recorded 54 compulsory winding-up petitions and 53 winding-up orders from courts this March, a slight increase compared to February's data but basically the same from the year earlier.

"Close to the bankruptcy figures, the city's current 4.6 percent unemployment rate is also expected to decline, which I hope could go well below 4 percent by the end of this year," Mak added.

However, Mak said getting the unemployment rate below 4 percent won't be easy in the year, since a crop of students is due to graduate in the summer, which may even bring up the unemployment rate again, since the job market still looks gloomy.

China Daily

(HK Edition 04/17/2010 page3)