A view of Hong Kong Photo: VCG

The financial secretary of the Hong Kong Special Administrative Region (HKSAR) has warned that the city's GDP may contract in the first quarter, with higher unemployment due to the outbreak of COVID-19, while expressing confidence in the future of Hong Kong's economy.

The HKSAR will soon be able to recover from the gloom and regain the momentum of economic growth, if the COVID-19 outbreak is successfully contained as soon as possible, although there is a good chance that the economy will contract year-on-year in the first quarter, wrote Paul Chan Mo-po on the official website of the Financial Secretary of the HKSAR on Sunday.

"The steady growth of the national economy and the sound long-term fundamentals of the economy provide solid support for the HKSAR to maintain its momentum. The Chinese mainland's GDP has exceeded 110 trillion yuan ($17.4 trillion), yet its huge economy has maintained steady and strong growth, which has played a stabilizing role in global trade and investment," Chan noted, explaining why he remained confident about Hong Kong's economic prospects.

According to Chan, the risks from the Russia-Ukraine situation for Hong Kong are manageable at this stage. In terms of trade, exports to Ukraine accounted for only 0.05 percent of Hong Kong's goods exports in 2021, and those with Russia accounted for 0.78 percent.

As energy costs only accounted for about 3 percent of the consumer price index and Hong Kong is dominated by the services sector, the impact of a sharp increase in international energy prices on Hong Kong's inflation will be moderate.

"Since the outbreak in early January, this wave of COVID-19 has severely affected people's lives, social operations and economic activities. The severe epidemic has put enormous downward pressure on Hong Kong's economy. To stabilize the economy, the fight against the epidemic must begin first," said Chan.

According to the HKSAR government on Sunday, about 300,000 people in the city were still under quarantine.

Chan said he has introduced measures to support small and medium-sized enterprises (SMEs) in the city. SEMs account for 98 percent of Hong Kong's businesses and employ 45 percent of the private sector's workforce.

"We are particularly grateful for the guidance and support of the central government, as well as the help and coordination of the mainland authorities and local governments. All the support shows the care and love of the nation for Hong Kong," said Chan.

Carrie Lam, chief executive of the Hong Kong Special Administrative Region (HKSAR), welcomes a freight train loaded with anti-COVID-19 supplies in Hong Kong, south China, March 2, 2022.(Photo: Xinhua)

He mentioned experts from the mainland arriving in Hong Kong quickly, nucleic acid testing personnel gathered from all over the country, the Huoyan laboratory, mobile testing vehicles and rapid testing kits put into use, and the construction of makeshift hospitals in seven days.

The Chinese mainland supplied about 2,000 tons of vegetables and 44 tons of pork to the HKSAR on Saturday, according to the Agriculture, Fisheries and Conservation Department of the HKSAR on Sunday.

"From COVID-19 to economic development, the nation has always provided the staunchest support for Hong Kong. We need to have firm confidence that whatever difficulties we encounter, with the support of the central government and the efforts of all of us, they will always pass. After the storm comes the rainbow. Hong Kong has a bright future for development," said Chan.

Global Times