Hong Kong’s retail sales in May slumped 32.8% from a year earlier, falling for the 16th consecutive month as the virus pandemic slammed the brakes on tourism and spending in the city.
Months of anti-government protest have also weighed on business activity in the Chinese-ruled financial hub, pushing many retailers to the brink of collapse.
Sales dropped to HK$26.8 billion ($3.46 billion), government data showed on Tuesday. They tumbled a steeper 36.1% in value terms in April and 42.1% in March. In volume terms, retail sales in May plummeted 33.9%, compared with a revised 37.5% fall in April.
The government said the decline in May continued as inbound tourism remained at a standstill and job and income conditions were weak although the coronavirus situation had stabilised.
“The business environment for retail trade remains difficult amid austere labour market conditions and the travel restrictions in place,” a government spokesman said.
For the first five months of 2020, the value of total retail sales decreased by 34.8%, and 36.5% by volume, compared with the same period in 2019.
Hong Kong’s economy suffered its worst quarterly drop on record in the first three months of the year, while the city’s biggest retailer association has estimated that 15,000 retail stores will close by the end of the year.
Hong Kong’s tourist arrivals in May plunged by 99.9 from a year earlier to 8,139 visitors, the Hong Kong Tourism Board said, matching the same percentage drop in April.
The number of mainland visitors also fell 99.9% to 5,670. Sales of jewellery, watches, clocks and valuable gifts, which rely heavily on mainland tourists, sank 69.7% in May, compared with a 76.7% plunge in April. Sales fell 67.0% for the January-May period.
After tolerating last year’s large-scale protests without sending in troops as many had feared Beijing took advantage of the world’s distraction with the pandemic to move swiftly to dismantle Hong Kong’s remaining freedoms. In a culmination of those steps, China’s top legislature today passed a national security law, entirely bypassing the territory’s own legislative procedures. It comes into effect (pdf) just in time for the anniversary of the territory’s handover from Britain to China—and protests are expected even though the city’s annual July 1 democracy march has been banned.
Right up to its passing the Hong Kong government had barely seen the law’s full text, let alone anyone else, but leaked details of the legislation suggested that Chinese security agents would be allowed to operate in the city for the first time; suspects could be held indefinitely in special detention facilities; and those convicted could face life imprisonment. (Update: The text of the law (pdf) was finally published only when it took effect at 11pm local time, June 30; China Law Translate has an unofficial English translation and here’s a thread on its alarming provisions
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