Budget 2021/22: Can Hong Kong emerge from an economic recession?
Like most economies, Hong Kong was hit hard by the COVID-19 crisis. To recover and thrive in a post-COVID world, they need a strong, carefully planned economic strategy and budget for 2021.
As part of our Redefining Hong Kong series, SCMP hosted a panel discussion to analyze Hong Kong’s latest budget. The Hon. Paul Chan Mo-po, GBM, GBS, MH, JP, Financial Secretary for the Government of the Hong Kong Special Administrative Region, presented his budget and economic strategy for 2021 at the panel, along with Paul Ho, Financial Services Tax Partner for Hong Kong, EY.
With moderators Olga Wong, SCMP Hong Kong News Editor, and Zuraidah Ibrahim, SCMP Deputy Executive Editor, the group discussed how this economic plan could help Hong Kong emerge from an economic recession.
While Hong Kong has already experienced two years of shrinking gross domestic product, the COVID-19 crisis exacerbated economic struggles. Hong Kong is also facing a housing crisis, hiring difficulties, structural deficit, and rising capital expenditure.
However, the 2021 budget is set to reboot the economy and return Hong Kong to economic expansion. The arrival and distribution of COVID-19 vaccines in the second half of 2021 is expected to revitalize Hong Kong and pave the way for a thriving economy.
The key is to find the balance between short-term pandemic relief measures and long-term economic challenges. While the government wishes to address its citizens’ financial hardship, it also needs to overcome hurdles like long-term economic recovery, an aging population, and government revenue constraints.
Striking that balance may be difficult, but it is not impossible. Paul Chan laid out Hong Kong’s economic strategy and goals for 2021, which address the above challenges to encourage economic growth.
At the center of his budget is diversification. With a diverse, resilient economy, Hong Kong can withstand unexpected crises like the COVID-19 pandemic in the future.
Part of diversification includes expanding Hong Kong’s partnerships and market reach to create more economic opportunities. Additionally, the plan includes incentives to boost jobs and encourage long-term learning, entrepreneurship, and development.
“Realizing long-term growth requires not only that we diversify our economy, but that we also expand our cooperation, our partnerships, as well as market reach. And I believe that in creating connections, you create mutual opportunities.” — The Hon. Paul Chan Mo-po, GBM, GBS, MH, JP
Paul Chan and the Hong Kong government plan to get back to a thriving economy within the near future. With a robust economic strategy and a strong budget, 2021 will likely see Hong Kong successfully emerge from a recession.
See the full panel discussion here:
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