Hong Kong will suffer economic loss of more than HK$40 billion (US$5.16 billion) a year if there is a 20-percent cut in the number of individual tourists from mainland China, according to a study commissioned by the local retail sector.
A cut in visitor numbers could lead to over 10,000 jobs lost in the city, with small- and medium-sized enterprises, the youth and low-skilled workers affected the most, economist Lam Pun-lee said in the report.
The economic losses estimated previously by the government’s census and statistics department and some market research agencies were too optimistic, the Hong Kong Economic Journal cited Lam as saying.
Lam oversaw the study after a mandate from Vincent Fang Kang, the legislative councilor representing Hong Kong’s wholesale and retail sectors, in June.
Earlier this year, Andy Kwan Cheuk-chiu, director of the ACE Centre for Business and Economic Research, said a study has determined that a 20-percent decrease in individual visitors from the mainland could cut Hong Kong’s gross domestic product growth by more than half to 1.4 percent this year, costing a total of HK$39.3 billion and leading to over 10,300 job losses.
Lam believes the loss will be way more than that, as the retail sector accounts for a significant portion of the jobs market. Spillover effects will spread across wholesale, storage, logistics and other sectors as well, he says.
Shop owners are likely to cut working hours as well as commissions payments to employees to offset losses, according to Caroline Mak Sui-king, chairwoman of the Hong Kong Retail and Management Association.
Lawmaker Vincent Fang Kang urged the government to put in place measures to divert certain visitors to different districts, through initiatives such as opening shopping centers near the border.
Infrastructure and transportation in border areas will be improved to facilitate development of tourism, said Gregory So Kam-leung, Secretary for Commerce and Economic Development.
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