Hong Kong Chief Executive Tung Chee-hwa (
The plan, announced by Tung at a press briefing, includes waivers for property, sewage and water charges, plus loan guarantees to protect half a million jobs in the tourism, entertainment, retailing and catering industries. The government will rebate HK$2.3 billion of salaries tax to encourage spending.
Like similar steps taken by Singapore a week ago, the measures aim to help small businesses and companies such as Cathay Pacific Airways Ltd, hotelier Shangri-La Asia Ltd and fast-food chain Cafe de Coral Holdings Ltd. People are staying home to avoid exposure to severe acute respiratory syndrome, or SARS, which has infected 1,458 people and killed 105 in the city in two months.
"It's already too late, the damage is already being done," said John Koh, a fund manager at Daiwa Asset Management Ltd, which runs US$200 million in Asia.
"How many companies are still around to apply for these benefits?" he said.
Tommy Cheung, a Legislative Council member representing the catering industry, said more than 100 restaurants have shut since the outbreak of the disease. The number of tourists visiting Hong Kong plunged by a third between mid-March and mid-April from a year earlier.
The Hang Seng Index fell 52.31, or 0.6 percent, to 8519.60, the lowest since Oct. 9, 1998, at the 4 pm market close. The index dropped 8.6 percent so far this year, the world's fourth worst-performing benchmark index behind those of India, Japan and Venezuela.
Tung has been criticized by opposition lawmakers for responding too slowly to the outbreak. China's leaders, who control the selection process that put Tung into his job, are questioning local politicians behind the scenes about his leadership abilities, the South China Morning Post reported.
Tung said he needed to balance the needs of business with the government's goal of reducing its deficit, forecast to be HK$68 billion in the year that began April 1.
"The measures seek to relieve the short-term impact of atypical pneumonia on our economy," Tung told a press briefing.
"They have also taken into account the medium-term need to make sure our budget is in balance," he said.
SARS has caught Hong Kong as the city was rebounding from its second recession in five years. The government said it will cut its previous 3 percent economic growth forecast for this year.
Hong Kong's budget deficit will be wider and growth will be slower this year because of SARS, Financial Secretary Antony Leung (
Some investors said reviving growth should be the government's priority.
"A one-off package is a good idea," said Andrew Salton, who helps manage $2.5 billion at Standard Life Investments Ltd.
"I wouldn't be concerned about the impact on the deficit," he said.
Under the government's plan, commercial rents in public housing estates will be reduced by as much as half for three months. Rates, water and sewage charges will be waived for up to four months for everyone, and license fees for the worst-affected industries will be scrapped for a year. Residents will each receive up to HK$3,000 via salaries tax rebates.
In the hotel and leisure industries, which have been worst-affected by the outbreak of the disease, the city will provide HK$3.5 billion in loans to pay salaries and protect jobs. The government also plans to create 21,500 temporary jobs and waive license fees for the transportation sector for a year.
DISCONTENT: The CCP finds positive content about the lives of the Chinese living in Taiwan threatening, as such video could upset people in China, an expert said Chinese spouses of Taiwanese who make videos about their lives in Taiwan have been facing online threats from people in China, a source said yesterday. Some young Chinese spouses of Taiwanese make videos about their lives in Taiwan, often speaking favorably about their living conditions in the nation compared with those in China, the source said. However, the videos have caught the attention of Chinese officials, causing the spouses to come under attack by Beijing’s cyberarmy, they said. “People have been messing with the YouTube channels of these Chinese spouses and have been harassing their family members back in China,”
The Central Weather Administration (CWA) yesterday said there are four weather systems in the western Pacific, with one likely to strengthen into a tropical storm and pose a threat to Taiwan. The nascent tropical storm would be named Usagi and would be the fourth storm in the western Pacific at the moment, along with Typhoon Yinxing and tropical storms Toraji and Manyi, the CWA said. It would be the first time that four tropical cyclones exist simultaneously in November, it added. Records from the meteorology agency showed that three tropical cyclones existed concurrently in January in 1968, 1991 and 1992.
Tropical Storm Usagi strengthened to a typhoon yesterday morning and remains on track to brush past southeastern Taiwan from tomorrow to Sunday, the Central Weather Administration (CWA) said yesterday. As of 2pm yesterday, the storm was approximately 950km east-southeast of Oluanpi (鵝鑾鼻), Taiwan proper’s southernmost point, the CWA said. It is expected to enter the Bashi Channel and then turn north, moving into waters southeast of Taiwan, it said. The agency said it could issue a sea warning in the early hours of today and a land warning in the afternoon. As of 2pm yesterday, the storm was moving at
GEOPOLITICAL CONCERNS: Foreign companies such as Nissan, Volkswagen and Konica Minolta have pulled back their operations in China this year Foreign companies pulled more money from China last quarter, a sign that some investors are still pessimistic even as Beijing rolls out stimulus measures aimed at stabilizing growth. China’s direct investment liabilities in its balance of payments dropped US$8.1 billion in the third quarter, data released by the Chinese State Administration of Foreign Exchange showed on Friday. The gauge, which measures foreign direct investment (FDI) in China, was down almost US$13 billion for the first nine months of the year. Foreign investment into China has slumped in the past three years after hitting a record in 2021, a casualty of geopolitical tensions,
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