4 | Tuesday, December 3, 2019 HONG KONG EDITION | CHINA DAILY HONG KONG HKSAR may see its fi rst defi cit since ’04

Social unrest, trade disputes strain tegic approach to ensure proper government coffers as income falls along resource allocation and maintain prudent government finances,” a forecast of 1.3% full-year contraction the fi nance chief said. “Even if the Hong Kong govern- By OSWALD CHAN in Hong Kong ment taps its huge fi scal reserves [email protected] for up to two years, it will not HK$119 derail the city’s economic growth The government is expected million prospects,” said Jack Siu, senior Asia-Pacifi c investment strategist to record its fi rst budget defi cit the defict of the HKSAR in 15 years as the city’s general governmen for the first seven at Credit Suisse. ‘We are not wor- economic environment has been months of this fiscal year ried about Hong Kong recording impacted by social unrest as well a budget defi cit.” as ongoing China-United States The fi nancial secretary said the Felix Chung Kwok-pan, leader of the pro-business Liberal Party, talks to China Daily about his opinions on trade frictions. 2004. The city had four consecu- government is mulling whether the United States passing the Hong Kong Human Rights and Democracy Act and the recent District Council “A budget defi cit for fi scal year tive budget defi cits from 2001 to to allow payments of tax, utili- election. CHINA DAILY 2019-20 is expected due to an 2004, when the economy was bat- ties and rates in installments to adverse economic environment, tered by the SARS outbreak. alleviate financial burdens of decreased tax revenues and lower “Hong Kong’s economy is now households. The administration land sale income, as well as relief in extremely difficult times. To is reviewing the e ects of stimu- Felix Chung dismisses HK measures announced during the restore the economy, different lus packages and will introduce year. The economy is forecast to sectors have to come together to additional measures if warranted. contract 1.3 percent in calendar stop the violence so that social Hong Kong’s government year 2019 from a year earlier,” order can be restored, citizens unveiled three rounds of eco- act as ‘unfair, unnecessary’ Financial Secretary Paul Chan can return to their everyday lives nomic stimulus programs worth Mo-po told lawmakers at a Leg- and businesses can resume nor- HK$22.5 billion since mid-August By JOSEPH LI in Hong Kong corporations employing a great many islative Council meeting on Mon- mal operations so that room can to pull the fl agging economy out [email protected] sta . Every year, they reap huge com- day. be created for rational dialogue,” of a recession risk. Hong Kong’s human mercial interests in excess of $33 bil- Hong Kong’s fi scal year ends on Chan said, referring to the pro- Hong Kong’s third-quarter Felix Chung Kwok-pan, leader of the lion from Hong Kong, and it is the March 31 annually. tests in recent months. gross domestic product retreat- pro-business Liberal Party, said it is rights record is bet- only place in the world where US com- The city’s beleaguered econ- ed 3.2 percent from the previous “unfair and unnecessary” for the Unit- ter than that of many panies reap such big profi ts. It is very omy, as witnessed by slumping Tough times for HK three months, after a 0.5 per- ed States to pass the so-called Hong countries. It is like an unlikely, at least for the foreseeable retail sales and tourist arrivals, On Friday, the government cent contraction in the second Kong Human Rights and Democracy future in the next few years, for the US is sustaining damage equivalent announced it had recorded a quarter, the worst slump since Act with the purpose of imposing sanc- annual body check for government to revoke Hong Kong’s to 2 percentage points of output HK$119.4 billion deficit for the 2009. Two consecutive periods tions on the SAR. a person. If his health special status and give up the huge growth, Chan said. fi rst seven months of the current of negative growth means Hong He calls this the usual hegemonic is good, there is no fi nancial interests.” He forecast a budget surplus of fi scal year. Fiscal reserves stood Kong has fallen technically into behavior of the US — to meddle in the HK$16.8 billion ($2.15 billion) for at $1.05 trillion as of end-October. a recession. internal a airs of China. need to worry.’’ Bargaining chip fi scal year 2019-20 when the bud- “The administration still pos- The city’s economy also posted However, he believes the Hong Kong Felix Chung Kwok-pan, “With the passage of the act, the US get was announced in February. If sesses adequate fiscal reserves an annual decrease of 2.9 per- law carries a greater psychological leader of the pro-business Liberal would gain greater bargaining power the forecast budget surplus turns and government fi nances are still cent in the third quarter. This impact than a real one, as it is unlikely Party in dealing with the Chinese mainland into a defi cit this fi scal year, it will in good shape. It will continue to is the fi rst yearly gross domestic that the US will give up the huge busi- and Hong Kong every year, and I think be the fi rst budget defi cit since adopt a forward-looking and stra- product decline since 2009. ness interests enjoyed by American stupidity or if they were incited by China’s bargaining power over the companies operating in Hong Kong. other people.” trade war is diminished,” Chung said. In an exclusive interview with China Noting that the law threatens to The Liberal Party leader is, however, Daily, Chung said US President Donald bar Hong Kong government o cials unimpressed with the SAR govern- Retailers and hoteliers bear the brunt Trump’s signing of the act into law coin- from entering the US and to freeze ment’s efforts to lobby against pas- cided with the District Council elec- their assets in the country, Chung said: sage of the act. In the summer, four tions in Hong Kong, and that sent the “This is no big deal if they choose not lawmakers from both the pro-estab- as protests cripple businesses in city wrong message. to go to the US. And as the tenure of lishment and opposition camps were “The timing was a plot. With the the current government will expire in invited to visit the US, but only Chung signing of the bill and the landslide vic- July 2022, the sanctions will only last and New People’s Party Chairwoman By LUO WEITENG in Hong Kong tory of the opposition camp, that gave a no more than two and half years.” Regina Ip Lau Suk-yee went; so the [email protected] ‘double blow’ to the Hong Kong Special The law also requires the US gov- pro-government voice was weaker. Administrative Region government. At ernment to report to the US Congress “After I returned to Hong Kong, I Hong Kong’s retail and hotel the same time, it also gave the negative annually the human rights conditions told the chief executive that she should sectors have yet to recover if the impression that the US government is in Hong Kong with reference to the send top government o cials to lob- latest sales fi gures are anything standing with the violent protesters in city’s status as a tari s territory sepa- by the US government and Congress to go by, with the city continuing Hong Kong,” he said. rate from the Chinese mainland. against passing the act. She replied to be mired in nearly six months “Hong Kong’s human rights record that officials of the Economic and of violent protests. ‘No big deal’ is better than that of many countries. Trade Office stationed there would The value of retail sales in Chung feels sorry that some Hong It is like an annual body check for a do the lobbying work. In the end, they October plummeted by 24.3 Kong people are waving the Ameri- person. If his health is good, there is succeeded in approaching more than percent from a year earlier, wid- can fl ag in the streets to thank Trump no need to worry. And since it is the 100 o cials, congressmen and sta ers. ening a loss of 18.3 percent in for passing the law. “Their behavior is US Department of State that submits “I don’t know if the ETO officials September and worse than a 23 totally wrong and childish,” he said. the report to the US Congress, there could approach top US o cials. The percent fall in August. “They don’t know much about the is fl exibility for the US government to US o cials and congressmen might According to the Census and US — that it would only do things in the submit a favorable report to the US think the SAR government was lacking Statistics Department, total interest of the country but not things Congress. sincerity by not sending top o cials to retail sales in the fi rst 10 months to help promote democracy in Hong “There are about 1,300 American Washington, DC. This shows the SAR of this year fell by 9 percent Kong. I don’t know if they did that out enterprises doing business in Hong government’s lobbying exercise was a compared with the same period Pedestrians pass by a closed shop in Mong Kok on Oct 22. Hong of their own volition because of their Kong, many of them multinational failure.” last year. Kong’s retail sales in October experienced the steepest fall on October’s retail performance record as ongoing protests have driven tourists away. Some small marked the steepest year-on- enterprises have been forced to shut down during the turmoil. year decline for a single month CHINA DAILY Election result a ‘surprise’ to Chung on record, and even worse than that recorded in September 1998 the second quarter, the num- By JOSEPH LI in Hong Kong Nov 24 district polling, Chung said. But during the Asian fi nancial crisis. ber of workers in the segment [email protected] violent demonstrations fl ared up again Financial Secretary Paul Chan dwindled by about 47,000. in several districts on the Saturday and Mo-po warned on Monday the The current wave “The ‘winter’ is coming,” Chan The overwhelming victory for the Only when different, Sunday. tourism industry is bracing for a of violent clashes said. anti-establishment camp in the just- balanced voices are “The militant protesters didn’t care more than 50 percent plunge in The government is consider- concluded 2019 District Council elec- heeded can we main- too much about the election as what visitor arrivals, with the jobless is the main culprit. ing a new round of stimulus tions was a surprise, said Liberal Party they want is a ‘lose-lose’ outcome,” he rate in the catering sector surg- If we want to have measures that will be revealed leader Felix Chung Kwok-pan. tain a healthy trend.’’ said. “But as the ‘pan-democrats’ want- ing to 6.1 percent. when the time is ripe. It was contrary to many people’s Felix Chung Kwok-pan, ed the election to go ahead because A pillar of the Hong Kong the travel alerts or The Li Ka Shing Foundation, belief that the pro-establishment camp leader of the pro-business Liberal they thought they could win, the mili- economy, the tourism sector advisories lifted, founded by Hong Kong’s richest could su er such a humiliating defeat. Party tant protesters stopped the violence for employs more than 250,000 peo- halting the violence man, said on Monday HK$900 With the opposition camp dominat- a while to stop the election from being ple, accounting for 6.7 percent of million out of a HK$1 billion ing 17 of the 18 district councils, he pro-establishment camp. canceled. I guess they will continue the city’s workforce. In the third and restoring order donation will be released to suc- predicts this will pose very big chal- “In a mature, civilized society, we the violence until the LegCo election quarter of this year, overall visi- are of paramount cessful applicants in the cater- lenges for the government in terms of must respect the election result,” the next year to force the government to tor arrivals in the SAR tumbled importance.” ing, retail and tourism sectors, the political landscape and the 2020 Liberal Party leader said. respond,” he added. by 26 percent from a year earlier as well as street peddlers and Legislative Council election. He said the election result showed Chung says this is a warning for the to 11.9 million — the sharpest Paul Chan Mo-po, vendors, within 60 days. Owing to the fact that a different what people were thinking and also government and pro-establishment financial secretary year-on-year drop since the sec- The remaining HK$100 mil- electoral system is used for Legislative that what the government had done camp. However, since a proportional ond quarter of 2003. lion will be set aside for eligible Council elections, the pro-establish- in the past six months had infuriated representation voting system is used in Visitor arrivals in October restoring order are of para- applicants who were not cho- ment camp can still win 38 or 39 seats people. Otherwise, not as many people LegCo elections, unlike a “single-ticket were down by more than 40 per- mount importance.” sen during the fi rst and second to remain the majority camp — bar- would have come out to vote, and the single-seat” voting system for district cent. It will be worse in Novem- Hotel operators are equally in rounds of funding through a ring any incidents or mistakes by the result would have not been like this. elections, he said the establishment’s ber with the tourism business dire straits. The average hotel random online draw. government. “The government must listen more to result will be fi ne. Unless there are any facing a more than 50 percent room occupancy rate in the fi rst The three rounds of “emer- Chung told China Daily: “At the the people,” Chung said. special incidents and errors by the gov- slump in visitor arrivals, said quarter of 2019 dived from 91 gency cash” have received more beginning, we sensed the result of the “Yet at the same time, the election ernment, the establishment can clinch Chan. percent a year earlier to 72 per- than 43,000 applications, with pro-establishment camp would not result shows that the people put politics 13 to 14 geographical seats plus 24 to 25 So far, 40 countries and cent. nearly 27,000 small- and medi- be too good. We thought the voting above everything, having no or very functional constituency seats to com- regions have issued travel alerts From August to October, the um-sized enterprises and ven- margin would be 60-40 or even 70-30, little regard for the district service of mand a majority in the legislature. or advisories for Hong Kong. unemployment rate in the food- dors set to benefi t. but nobody, not even the opposition candidates. This is not a healthy trend. However, personal votes rather than “The current wave of violent and-beverage services sector Up to 1,584 licensed small and camp, would imagine an 85-15 win- Only when di erent, balanced voices corporate ones are counted in certain clashes is the main culprit,” rose sharply to 6.1 percent — medium-sized travel agencies ning margin, whereas in the Wong are heeded can we maintain a healthy functional constituencies — such as the Chan said. “If we want to have from 4.3 percent in the second and 4,942 licensed vendors have Tai Sin and Tai Po district councils, trend.” engineering and surveying sectors. So the travel alerts or advisories quarter — the highest in more applied for the third batch of it was all-in for the ‘pan-democrats’, A brief truce or cessation of violence it is vital these sectors do not fall to the lifted, halting the violence and than six years. Compared with funding. leaving no room for voices from the occurred a few days before and after the opposition camp, Chung added.