HK Policy Address 2024: SMEs should reform and improve, leader John Lee says amid a wave of biz closures
Hong Kong Free Press
Hong Kong’s Small and Medium-sized Enterprises (SMEs) should “help themselves” and strive for self-improvement, the city’s leader John Lee has said in response to questions about his Policy Address measures for supporting the local business sector.
Lee said during a Wednesday evening TV show that Hong Kong’s economy is facing “a transitional period,” with changing tourist habits and Hongkongers heading north to China to spend during weekends and holidays.
“Different sectors faced different problems amid a transitional period of the economy… On one hand, the government will try its best to help… On the other hand, [SMEs] should help themselves too,” Lee said in Cantonese when asked by a reporter whether there were sufficient measures in the Policy Address to support SMEs amid a wave of closure.
Lee continued: “We should all face a reality: in the transitional period, we all need to reform, to strive for self-improvement, and to seek out our own advantages.”
Some companies performed even better than before this period, Lee added, citing what he heard from the sector during Policy Address consultations.
The chief executive said that, according to the government predictions, Hong Kong will see a 2.5-3.5 per cent GDP increase in 2024.
Hong Kong’s SMEs have been suffering from tight cash flows after the city lifted all Covid-19 restrictions early last year.
In March, a majority of SMEs reported revenue drops compared to pre-pandemic levels, whilst 74 per cent expected cash flow to be a key challenge in the year ahead according to an August survey by the Hong Kong General Chamber of Commerce.
On Wednesday morning, Lee introduced eight measures to support SMEs, including offering easier loan repayment terms, injecting HK$1 billion into a fund which helps them to upgrade operations and develop new markets. The government also pledged to inject HK$0.5 billion into supporting exhibition organisers.
In response, policy think tank Liber Research Community said on Facebook that the economic policies in the 2024 Policy Address did not meet the needs of people’s livelihoods and did not pay attention to the sales sector, which faced the most severe problems.
The group said the focus of the government has been enhancing foot traffic but – with local consumers heading north and tourists’ consumption levels falling – footfall will not be as fruitful as before.
Sales drop
Hong Kong’s retail and F&B sectors have seen business slumps over the past year. According to government’s statistics, provisional retail sales for August decreased by 11.8 per cent compared with a year earlier, worse than the market expectation of 9 per cent.
The provisional estimate of the volume of total restaurant receipts decreased by 4.6 per cent in the second quarter of 2024 compared with a year earlier, according to the Census and Statistics Department.
A series of chain stores and canteens announced citywide closures, or downsizing, this year including US chain Garrett Popcorn, Kam Kee Cafe, and health product chain CR Care.
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