Hong Kong is ‘highly resilient’ as it fights to save the economy in the pandemic, commerce secretary says

Hong Kong is fighting a “twin battle” — fending off the coronavirus pandemic and trying to save its battered economy at the same time — but the city remains “highly resilient” despite the challenges, its commerce secretary said Tuesday.

Hong Kong’s recovery depends on global trade and will be determined by when the world gets back on its feet, Edward Yau, Hong Kong’s secretary for commerce and economic development, told CNBC on Tuesday.

The Asian financial hub’s economy has been hit hard by consecutive crises over the past year: from the U.S.-China trade war that intensified in 2018, to the months-long protests which shuttered shops and severely hit tourism last year.

Now, the city is faced with a health and economic crisis brought on by the global coronavirus pandemic that has infected more than 1,000 people in the Chinese territory, and killed at least 4, according to the latest data from Johns Hopkins University.

“Hong Kong, and in fact the global economy, are fighting a twin battle — one is the fight against the epidemic and the other is in fact fighting to save the economy. The second battle could not be (won) without winning the first one,” said Yau.

“As we all see around the world, cities are being locked down, the economy at a doldrum. It requires the whole community to come together,” he said.

Like other countries, Hong Kong has temporarily shut offices and schools, as well as banned foreign visitors in a bid to contain the virus spread. It also imposed a two-week closure of gyms and bars, and a capacity limit of 50% at restaurants.

Many businesses were hoping the city would return to normal again after nearly one year of social unrest, followed by months of the coronavirus outbreak which was first reported in the Chinese central city of Wuhan in late December. But the wave of cases and subsequent government regulations that followed have dealt another devastating blow for business owners.

“We are hit by a number of factors in the last 18 to 24 months — U.S.-China trade war has given us collateral damage, the social unrest last year has caused some downturn in the economy, and with this (pandemic) … That also says Hong Kong remains highly resilient despite all these negative factors,” Yau said.

While Hong Kong’s government has put in place measures to support businesses, Yau said, whether business confidence returns to the city also depends on the global recovery.

“We also need to look at the global picture. In this pandemic, no city, no government, no country is being spared, and Hong Kong is a highly international city … we also need to see the whole world getting back on its own feet,” he said. 

“Knowing Hong Kong, how we are closely knit as an international community … any relief package will need to be across the board,” Yau said. “We cannot just focus resources on a single sector, because they’re intertwined.”

Hong Kong’s government has so far given out relief packages worth around $37 billion in total, or representing about 10% of its GDP. In February, Hong Kong’s government had announced more than $15 billion worth of measures to help a battered economy that was already reeling from the impact of those pro-democracy protests. 

It’s also making sure that businesses stay afloat through this “bitterly cold winter” by having sufficient cash flow, Yau said. For instance, it has launched a loan scheme for businesses worth up to $123 billion Hong Kong dollars, he said.

— CNBC’s Uptin Saiidi contributed to this report.