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Financial chief warns of 'technical recession'

By Luo Weiteng and Chai Hua | | Updated: 2019-08-06 13:54
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A trolley with umbrellas is seen at Bonham Strand East in Sheung Wan, Hong Kong, July 29, 2019, hours after protesters clashed with police. [PHOTO / CHINA DAILY]

As waves of anti-extradition-bill protests crested with a citywide strike that brought transportation chaos and gridlock to Hong Kong on Monday, the city's top financial official warned the local economy faces the gloomy prospect of a "technical recession".

"As the protracted Sino-US trade tensions and ongoing mass protests cast a shadow over Asia's financial center, Hong Kong's economy is showing signs of losing steam," Financial Secretary Paul Chan Mopo said at the news conference, where Chief Executive Carrie Lam Cheng Yuet-ngor made her first public appearance in two weeks to toughen her stance against the protesters.

The city's years-long prosperity and stability is the result of generations of hard work, Chan said. He added that the Hong Kong government has lent an ear to the people's dissatisfaction over the handling of the bill and the city's governance, and accused protesters of gambling with the lives of 7 million people in the region.

Chan said he hopes local citizens think twice before carrying out political movements.

In his weekly blog on Sunday, Chan said the city's economic output for the second quarter of the year climbed 0.6 percent year-on-year, citing fi gures from the Census and Statistics Department. However, taking the seasonally adjusted quarter-toquarter comparison basis into consideration, economic output in the second quarter actually decreased 0.3 percent year-on-year, Chan said.

"If the negative growth continues in the third quarter, Hong Kong could technically fall into recession," he warned in the post. "Middle classes who have families to feed and grassroots wage earners would be among the first to suffer."

Many sectors, including trade, investment and retail, which have long been the backbone of Hong Kong's economy, felt the ripple effect from the growing uncertainties, which could impact on people's livelihoods and employment, he said.

For instance, inbound tourism has created more than 220,000 jobs in the retail, catering and hospitality industries, while the trade and logistics sectors employ over 720,000 people.

Research houses joined the chorus of concerns over Hong Kong's foggy outlook. DBS Bank projected that the local economy may decline by 0.6 percent in the second half, leading to zero economic growth for all of 2019. A close watch should be kept on the lack of economic growth momentum and possible structural change of exports, DBS said.

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