Many small and medium enterprises, as well as large corporations in Hong Kong, fear they’ll only be able to survive for up to half a year without further government relief measures as the coronavirus pandemic rages on.
According to a recent survey conducted by the Hong Kong General Chamber of Commerce — the city’s largest multinational business group — 42 percent of the SMEs polled and 24 percent of the corporations felt that way.
SMEs are the heart and soul of Hong Kong’s business community. ... It’s vital that the public and private sectors come together to ensure that they ride out this crisis
George Leung
HKGCC chief executive officer
The survey showed that SMEs are bearing the brunt of the outbreak, with 60 percent of their turnover having plunged by half, compared to 29 percent for large companies. The respondents cited “business partners in financial difficulties” and the “uncertainties arising from foreign sanctions” as the two key challenges they’re facing.
And, SMEs were being hit harder as a result of “insufficient cash flow” and “being forced to suspend operations due to poor business”.
The survey, conducted between August 11 and 15 this year, covered 231 companies, of which 25 percent were from the professional and business services sector, and 15 percent from the trading sector. Nearly 60 percent of those interviewed were SMEs with less than 50 employees.
Up to 36 percent of the respondents said their turnover had plunged by at least half from pre-COVID-19 levels.
“SMEs are the heart and soul of Hong Kong’s business community. It’s deeply worrying so many of our smaller businesses are in distress. It’s vital that the public and private sectors come together to ensure that they ride out this crisis,” said HKGCC Chief Executive Officer George Leung.
“Although the third wave of COVID-19 infections has shown signs of easing, it has yet to be brought under control. As such, the current containment measures and worries will continue to take a heavy toll on local consumption, business sentiment and exports of services,” warned OCBC Wing Hang Bank economist Carie Li.
“But, we expect the economic contraction to narrow in the second half of this year, given the low base effect and a benign global recovery,” she said.
