ECON PU Hong Kong Economy Regression Due Coronavirus Pandemic Discussion

Explain “Why the following factors would not ruin HK’s future in the next 20 years”.

1. The normalisation of the COVID-19 pandemic and its side effects

2. Property market( price keeps going down)

3. The dramatic decrease in the amount of import of goods and services due to political issues

4. Serious population ageing

5. The impact of fluctuations in the global view

6. Hong Kong’s economy regression is lowering down the government’s income.

7. Due to the different stages of economic development and the need for the division of labor, the manufacturing industry that once promoted Hong Kong’s economic growth is moving to the mainland in large numbers. The service industry is left, and Hong Kong’s overall competitiveness is showing a downward trend to some extent.

Hong Kong’s previous economic growth was achieved by large-scale factor agglomeration. It did win the efficiency of factor agglomeration under the role of highly market-oriented conditions. At the same time, it also caused Hong Kong’s economic growth to have a more serious phenomenon of agglomeration and economic stagnation, that is, the operating costs of housing expenditure as the main component, which also made economic transformation and economic growth face increasing costs.

According to economic data released by the SAR government, Hong Kong’s economy experienced negative growth for two consecutive quarters in 2001, and officially entered a recession from a technical perspective. The pace of recovery has been slow so far. The SAR government originally expected GDP growth of 3% in 2003, but due to the impact of the SARS epidemic, it has stated that it is unable to meet the expected target, and most economic forecasting agencies have also lowered Hong Kong’s GDP growth forecast to between 0.2% and 2.5%. Public opinion believes that the weak performance of the Hong Kong economy is largely attributable to weak local demand. Local demand supports 55% of the Hong Kong economy but has been showing a downward trend. According to this, industry insiders believe that Hong Kong is actually in deflation .

In addition, the price of real estate, which has long been a point of economic growth in Hong Kong, has continued to fall, and the resulting negative equity problem has become more and more serious. At present, Hong Kong real estate prices have fallen by 60% from their peak in 1997. In other words, an ordinary citizen bought a house for about 2 million Hong Kong dollars during the peak of the property market in 1997. Today, 6 years later, the property price is only worth 800,000. The buyers often add “negative equity” because of debts in banks. Class” ranks. On June 17, the SAR government announced that the unemployment rate from March to May reached 8.3%, a record high, with over 290,000 unemployed

Sources:

https://tradingeconomics.com/hong-kong/indicators

and other websites in the photo