Hong Kong’s economy has rebounded sharply from the Covid-19 pandemic – but it’s not out of the woods yet and some sectors are still faltering, the city’s chief trade official said.
“The distribution of this recovery is quite uneven,” Edward Yau, Hong Kong’s Minister for Trade and Economic Development, told CNBC’s Squawk Box Asia on Thursday.
Yau said imports and exports have been a “very strong catalyst” of growth in recent months, with total trade hitting record highs in a few months. However, retail sales are weakening and tourism is still struggling to recover, he said.
Such uneven economic performance is also and is likely to remain in the labor market as Hong Kong faces the “twin battle” of curbing the spread of Covid and revitalizing the economy, Yau added.
Hong Kong’s economy grew 7.9% year over year in the first quarter of 2021. It was the city’s first economic expansion in six consecutive quarters, with a year-over-year decline.
A man wearing a protective face mask stands on the Tsim Sha Tsui waterfront in Kowloon overlooking Victoria Harbor in Hong Kong.
Anthony Wallace | AFP | Getty Images
Before the pandemic, Hong Kong – a semi-autonomous region ruled by China – was rocked by widespread pro-democratic protests that turned violent at times. The unrest pushed the economy into recession for the first time in a decade in 2019, fueled by a sharp drop in retail sales and tourist arrivals.
The Covid outbreak dealt another blow to the economy.
While retail sales have been recovering since February this year, the pace of growth has slowed. Meanwhile, visitor arrivals in Hong Kong remained weak.
Yau said it was encouraging that the number of daily Covid cases fell and stayed low in Hong Kong over the past month. This could allow other segments of the economy to recover, but new waves of infections could still emerge, he added.
“The lesson we learned is to try to cut the time it takes to suppress the outbreak,” Yau said, adding that the ability will help instill trust with individuals and businesses.
