Hong Kong’s economy shrank 9.1 percent and 9 percent year-on-year in the first and second quarters of the year. The special administrative region government expects 2020 full-year GDP to contract by 6 percent to 8 percent.

Total goods exports declined mildly by 2.4 percent in the second quarter, thanks to a strong rebound in the mainland economy boosting our re-exports. But with effectively zero inbound and outgoing tourist traffic, our tourism industry is in hibernation mode. With soaring unemployment and lingering uncertainty across a range of issues from United States sanctions to COVID-19, consumption and investment are very weak. Recently, the city’s office vacancy rate hit a 12-year high. Because of the weak economy and the generous relief measures to counter the effects of the recession, the fiscal deficit is expected to exceed HK$300 billion ($38.7 billion) this fiscal year. Obviously, this is not sustainable.

While a 6 percent to 8 percent negative growth is bad, the human suffering for many is unbearable and backbreaking. Many have lost 80 percent or more of their income; some have not only lost all their income, but are also fast exhausting their savings; some are falling prey to fraudsters and loan sharks as they are under pressure to borrow to pay their bills. It is imperative that we all work together to stop this hemorrhage as soon as possible. 

The good news is that the government has now plugged the loopholes that had allowed infected air and sea crew members to be exempted from quarantine. With very stringent social distancing and suspension of some risky activities and business activities, we are now seeing a clear trend of declining COVID-19 infections.

I hope that landlords who can afford it offer rent relief to needy tenants. By sharing the pain with tenants, they would foster solidarity among Hong Kong people. That will help make Hong Kong a more “livable” city  

Against this backdrop, the government last week saw fit to allow restaurants to stay open until 9 pm. Given that restaurant guest numbers typically fall in the later hours of the evening, I see little harm in extending business hours further to 10 pm. I would even allow parties of six dining together, provided that they are from the same family. This will help the restaurant businesses greatly without undue risks.    

The SAR government just launched the Universal Community Testing Programme. I see this as an important step to reviving the economy. It will not only help identify possible asymptomatic virus carriers, but also help collect information to allow the Center for Health Protection to adjust its policies promptly. In addition, it can potentially inform the public and the world about how safe Hong Kong really is. Only a revival of confidence can return life to normal. For all of these reasons, the program deserves the full support of all Hong Kong people. When we finally get data that shows to the world that Hong Kong is very safe, we can form “travel bubbles” with other equally safe jurisdictions. The sad thing is that too many jurisdictions have attempted travel bubbles without getting ready in the first place. That will not work. 

Last month the Hong Kong Monetary Authority raised the loan-to-value ratio cap to 50 percent from 40 percent for non-residential properties. That is a good move. Following the announcement of the policy, transactions in these properties jumped without triggering a rise in prices. In general, property transactions will help move the economy, because they directly and indirectly add business across a range of related industries or trades including brokerages, legal services, decorations and repairs, furniture and appliance sales, transportation, etc.    

With a weak economy and rising unemployment, rents are falling. I would advise abolishing the special stamp duty and the 15 percent stamp duty on the second property owned. To ward off potential speculation from overseas investors, the SAR government should retain the buyer stamp duty for non-Hong Kong residents, but I would exempt businesses that are registered in Hong Kong and are owned by Hong Kong residents.

While some sectors are hard hit, those in public service or publicly funded bodies are relatively unhurt. I would very much hope that they will do their part in opening up the purse and spending more, including using taxi services more often. As well, I hope that landlords who can afford it offer rent relief to needy tenants. By sharing the pain with tenants, they would foster solidarity among Hong Kong people. That will help make Hong Kong a more “livable” city. 

Of course, the most important thing is that all parties work together to prevent a fourth wave of COVID-19 infections. The third wave was a serious blow to us. Fortunately, the government has now plugged the loopholes that had allowed imported cases to infect the community. By being more sensitive to the needs of the community, the government will foster trust and solidarity. That will help the fight against the pandemic. In this regard, I strongly endorse the suggestion of the Hon Michael Tien Puk-sun, who advised the use of hotels as quarantine venues in lieu of extending the use of the Chun Yeung Estate. Hong Kong should thank the assigned tenants of the public housing estates for their sacrifice in having to wait this long beyond the promised date of moving in, instead of taking advantage of their good nature. This way we can work together in solidarity to revive our sagging economy.

The author is a senior research fellow at Pan Sutong Shanghai-Hong Kong Economic Policy Research Institute, Lingnan University.

The views do not necessarily reflect those of China Daily.