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Thursday, Aug 06, 2020

Hong Kong third wave: finance chief warns of new coronavirus blow for businesses

Financial Secretary Paul Chan says Hong Kong needs to strike a balance between tackling coronavirus pandemic and keeping economy running. Return of virus means Hongkongers will gather outside less, and spending will be delayed so economy will take another hit, he says

Hong Kong needs to strike a balance between fighting the coronavirus pandemic and keeping the economy going, the city’s finance chief says, warning that the latest spike in Covid-19 cases will result in another blow for businesses.

Financial Secretary Paul Chan Mo-po’s remarks came as a third wave of local infections hit the city less than a week after residents started receiving a HK$10,000 cash handout under a government scheme to boost the economy by encouraging spending.

In an article on his official blog on Sunday, titled “Fighting two battlefronts”, Chan said both virus prevention and economic recovery “would be marathons”.

“Summer is traditionally a peak season for spending. Originally there was hope that local retail and food and beverage spending would increase, as travel restrictions kept people from travelling abroad,” he wrote.

“However, the return of the virus means Hongkongers will gather outside less, and spending will be delayed so the economy will take another hit.”

Chan said people needed to avoid unnecessary trips around the city. But he also warned that if most social and economic activities were halted for a long time, the city’s ability to keep up epidemic prevention would be undermined.

“Therefore, it is equally important for us to maintain economic activities to satisfy the needs of people’s livelihoods and at the same time keep up epidemic prevention work,” he said.

Along with his article were two graphics, with the need to “stay at home”, and the government’s “suppress and lift” strategy in tackling the Covid-19 epidemic as the main themes.

Under the strategy, the government aims to drive down new infections to a low level, then loosen the reins while watching for any resurgence.

The Centre for Health Protection’s advice is that the coronavirus may not go away and people should learn to live with it and adapt to the new normal. The public needed to be prepared for inevitable small-scale local outbreaks from time to time. Social-distancing measures may need to be tightened at times, according to the centre.

In his blog post, Chan urged businesses to do online promotions for sales and to tide them over until the third wave subsided, at which point it would also be easier to attract customers to their physical locations.

The government has forecast the city’s gross domestic product will contract anywhere between 4 and 7 per cent in 2020 after shrinking 8.9 per cent in the first quarter year on year, the most for a single quarter since records began in 1974.

The city’s three-week streak without local infections ended on July 5 and has since seen a dramatic resurgence in cases, with 38 confirmed on Sunday, pushing the total to 1,469.

Following the fresh spike in infections, social-distancing measures for restaurants and venues such as bars and gyms were reintroduced, as health authorities warned the most recent wave was the city’s most severe yet.

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