More business closures, layoffs imminent after Lunar New Year: Chan

The finance secretary said the current situation is still severe.

The Lunar New Year might not prove as lucrative for businesses this year as the economic situation brought by the pandemic is still severe, according to Hong Kong Financial Secretary Paul Chan Mo-po.

Chan also feared that more businesses will close and layoffs will continue after the Lunar New Year.

He wrote in a blog post that despite the government introducing 300 billion yuan of support and relief under the government’s budget and the Epidemic Prevention and Anti-epidemic Fund, the financial support is merely a drop in the bucket.

“Workers are struggling to survive and are willing to take the initiative to introduce enhanced epidemic prevention measures. Under the premise of more effective prevention of virus infection, in exchange for the resumption of business and some activities as much as possible, it also gives the public a little more breathing space,” Chan wrote.

According to Chan, in terms of figures, Hong Kong has started to recover and has a likely possibility to have a positive growth in 2021 but the current situation remains severe.

“Take the recent figures released by the Official Receiver's Office as an example. Last year, the number of bankruptcy applications was close to 8,700, an increase of 6.6% year-on-year; about 450 petitions for compulsory winding-up were filed, an increase of 7.2% year-on-year. In December, the Hong Kong Purchasing Managers Index returned to the contraction range, and the business atmosphere of SMEs also tended to be pessimistic,” Chan added.