HONG KONG, Jan. 29 (Xinhua) — After registering a steep decline last year, Hong Kong is geared for a marked economic recovery in 2021, backed by the steady development of the mainland, which just became the only major economy to post positive growth amid the COVID-19 pandemic.
Hong Kong’s economy stumbled 6.1 percent year-on-year in 2020 as the pandemic disrupted business activities and dampened consumption, official data showed on Friday.
The gross domestic product (GDP) went down 3.0 percent in the fourth quarter last year, narrowing from a 3.6-percent drop in the third quarter, according to the advance estimates of the Census and Statistics Department of the Hong Kong Special Administrative Region (HKSAR) government.
A government spokesperson attributed the severe economic contraction mainly to the fallout from the pandemic.
Consumption- and tourism-related sectors such as accommodation, food services and retail trade were particularly hard hit, recording steeper declines than the overall economy, the spokesperson said.
As the epidemic raged in Hong Kong, stringent social distancing was adopted and cross-border trips plunged, which dealt a major blow to the economy heavily reliant on ties with the outside world. Businesses struggled to keep afloat and numerous jobs were lost.
Paul Chan, financial secretary of the HKSAR government, said the economy experienced the worst ever recession.
Compared with 2019, private consumption lost 10.2 percent this year, and government spending rose 7.8 percent. Fixed capital formation decreased 11.6 percent. Goods exports and imports went down 0.3 percent and 2.1 percent, respectively. Services exports slumped 36.8 percent, and imports tumbled 35.2 percent.
However, after a year of hardships, the light has appeared at the end of the tunnel.
The spokesperson pointed out that the economy continued to recover in the fourth quarter of 2020, albeit at a slow pace due to the fourth wave of infections, as goods exports strengthened and the financial markets remained vibrant.
The official data showed on a quarter-on-quarter basis, Hong Kong’s GDP improved slightly by 0.2 percent in the October-December period of 2020.
The spokesperson predicted that the local economy will return to the positive territory this year thanks to the mainland economy.
Experts forecast the mainland, after emerging as the only major economy to grow last year, will continue to gather steam in the first quarter of 2021 and realize a strong rebound for the whole year.
By integrating into the country’s new development pattern featuring “dual circulation” and the development of the Guangdong-Hong Kong-Macao Greater Bay Area, Hong Kong can find new growth points and break its bottlenecks, Liao Qun, chief economist of the China CITIC Bank International, said.
Hong Kong young people and some small and medium-sized enterprises should start to grope for ways of transformation so that they can seize the opportunities in the mainland markets, Chairman of the Hong Kong Association of China Business Wong Ping said.
Meanwhile, the spokesperson still cautioned that the situation in the first half of this year could remain challenging and the recovery is subject to epidemic control both locally and outside of Hong Kong, including the vaccination campaigns in the world’s major economies.
The HKSAR government will monitor the situation closely and adopt appropriate counter-cyclical measures to facilitate economic recovery and relieve people’s financial burdens, the spokesperson said.