Hong Kong’s economy has rebounded sharply after being hit by the Covid-19 pandemic — but it’s not out of the woods yet and some sectors are still reeling, said the city’s top trade official.
“The distribution of this rebound is rather uneven,” Edward Yau, Hong Kong’s secretary for commerce and economic development, told CNBC’s “Squawk Box Asia” on Thursday.
Yau explained that imports and exports have been a “very strong catalyst” of growth in the last few months, with overall trade hitting record levels in some months. However, retail sales are moderating and tourism is still struggling to recover, he said.
Such uneven economic performance is also reflected in the jobs market, and will likely remain so as Hong Kong faces the “twin battle” of containing the spread of Covid and reviving the economy, added Yau.
The Hong Kong economy grew 7.9% in the first quarter of 2021 compared to a year ago. It was the city’s first economic expansion after six consecutive quarters of year-on-year contraction.
A man wearing a protective face mask stands on Kowloon’s Tsim Sha Tsui waterfront that faces Victoria Harbour in Hong Kong.
Anthony Wallace | AFP | Getty Images
Before the pandemic, Hong Kong — a Chinese-ruled semi-autonomous region — was rocked by widespread pro-democracy protests that turned violent at times. The unrest sent the economy into a recession in 2019 for the first time in a decade, driven by a steep decline in retail sales and tourist arrivals.
The Covid outbreak dealt another blow to the economy.
While retail sales have recovered since February this year, the pace of growth has slowed down. Meanwhile, visitor arrivals into Hong Kong have remained weak.
Yau said it’s encouraging that the number of daily Covid cases has fallen and stayed low in Hong Kong over the past month. That would allow more segments of the economy to recover, but fresh waves of infections could still occur, he added.
“The lesson we learned is try to shorten the time to suppress the outbreak,” said Yau, adding that the ability to do so will help instill confidence among individuals and businesses.