HK makes "unprecedented" efforts to support businesses

China's Hong Kong announced Wednesday a basket of relief measures worth 137.5 billion Hong Kong dollars in total (17.74 billion U.S. dollars) to prop up businesses and residents struggling amid the COVID-19 epidemic.

As a key part of the package, the government will allocate 80 billion Hong Kong dollars pay up to half of the wages of workers from coronavirus-hit sectors for six months, capped at 9,000 Hong Kong dollars for every beneficiary each month, Carrie Lam, chief executive of China's Hong Kong Special Administrative Region (HKSAR), said at a press conference.

The program will benefit about 1.5 million workers across Hong Kong, with the first batch to be distributed as early as in June in a two-phase arrangement. Besides, 215,000 self-employed people will be granted one-off subsidies.

Lam described the relief efforts, including an array of other measures disclosed at the press conference, as "unprecedented" and stressed the goal is to prevent possible massive bankruptcies and lay-offs triggered by the epidemic.

The Hong Kong economy has suffered from the double-blow of social unrest in 2019 and the COVID-19 outbreak since the beginning of the year. From restaurants to retailers, businesses in a wide range of sectors can hardly keep afloat, and the livelihood of residents has been seriously threatened.

As a key economic indicator, the jobless rate increased to 3.7 percent, the highest level in more than nine years, in a three-month period ending February.

Wednesday's move has been widely anticipated by the society.

The measures are all-encompassing in scope and unprecedented in scale and intensity and should alleviate the pandemic's effect on the economy and pave the way for economic recovery, non-official members of the Executive Council said Wednesday evening in a statement.

Measures adopted appeared to be precise and targeted as sectors hit the hardest by the epidemic were identified and more plans were unveiled to resolve difficulties of grassroots residents in the schemes.

Altogether 16 items of reliefs worth 21 billion Hong Kong dollars were published to cover sectors including aviation and tourism, as well as workers from coaches to property agents.

Taxi and red minibus drivers will receive a monthly subsidy of 6,000 Hong Kong dollars for six months, and cinemas will be offered 100,000 dollars per screen, with the maximum amount for each cinema at 3 million dollars.

Travel agents will get cash subsidy up to 200,000 Hong Kong dollars, and hotels will get at most 400,000 dollars. One-off subsidies ranging from 250,000 to 2.2 million dollars will be distributed to catering outlets based on their size.

Experts believe the targeted subsidies will help businesses offset falling revenues amid stringent social distancing measures enforced by the government to prevent the COVID-19 spread.

To further relieve the burden on businesses and residents amid economic hardships, the relief package also included a cut in metro fees for six months starting in July, lowered rent of government-owned properties, extended reduction in water use and sewage costs, deferment of personal income tax payment and interest-free student loan repayment, and exemption of registration fees of medical staff.

Efforts will be taken to create more jobs. Carrie Lam promised 30,000 time-limited jobs in both public and private sectors in the next two years, saying the government will recruit 10,000 more civil servants in 2020-21 year and launch 5,000 short-term youth internships.

While such large-scale relief efforts fanned concerns about a sharp increase in the deficit, financial secretary Paul Chan said at the press conference that the government response is necessary to tackle the shock wave of the pandemic sweeping across the globe.

As the COVID-19 outbreak has dealt an even heavier blow to the world economy than that of the global financial crisis more than a decade ago, Hong Kong is in particular facing serious challenges, with its pillar industries including retail and tourism far from recovering from months-long violent protests last year.

Given the grim situation, the government must take decisive and powerful measures to prevent a downward spiral in the economy and employment, Chan said.

The two rounds of economic stimulus of the HKSAR government in recent months, plus policies in the Budget, have totaled nearly 290 billion Hong Kong dollars, equivalent to almost 10 percent of Hong Kong's GDP.

Those measures are proportionate to Hong Kong, compared to efforts of other economies in the world, Chan said, predicting that pro-growth policies since last August combined will provide a 5-percent buffer for GDP.

Chan stressed the government budget remains steady as fiscal reserves, deducting the deficit, still stands at 800 to 900 billion Hong Kong dollars, or 14 to 15 months of government expenditures.

HK govt mulling more relief measures to cushion virus impact