The economy of the leading Chinese and global financial center, Hong Kong, is still reeling from the pandemic, and its unemployment rate could reach a new multi-year high, the city’s financial secretary said.
Although its economy started to rebound from the Covid-19 crisis and is set to grow this year, Hong Kong’s labor market is still under tremendous pressure, Financial Secretary Paul Chan Mo-po wrote on his website on Sunday. He said the number of unemployed people in the city could have been a 16-year high in the last quarter of 2020.
The official data for the October-December period is set to be released on Tuesday. Hong Kong’s jobless rate was already at the highest level in nearly 16 years in the third quarter, when it rose to 6.4 percent from 6.1 percent seen in the previous three months.
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The drop in employment levels comes despite relief efforts, including a series of measures to support the labor market, Chan said. He noted that last year’s riots in the city still have an impact on the jobs sector, in addition to the consequences of the pandemic, especially for graduates.
The financial secretary also warned that more layoffs could come after what is usually a busy business period, the Lunar New Year, which is celebrated in China next month. He said that retail companies and restaurants usually see booming demand during the holiday, but they are still “severely affected” by the pandemic. The city is also closed for the bulk of foreign tourists, depriving it of a vital source of revenue. Last year, arrivals to Hong Kong plunged by over 90 percent after the virus started spreading across the country.
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If the epidemic situation does not improve, the city will see more business closures soon, Chan added.
After becoming the first country to suffer from the rapidly spreading virus, China has largely contained the outbreak. However, some local coronavirus spikes have been detected. Hong Kong also saw a sudden rise in cases at the end of last year, forcing it to scrap plans to open the long-anticipated travel bubble with Singapore.
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