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Hong Kong has entered its second recession in three years.
Economists surveyed by Bloomberg had predicted Hong Kong’s economy would contract 0.2 percent in the second quarter.
Instead, it shrank by 1.4 percent on top of a 3.9-percent contraction in the year’s first quarter.
About 65,000 Chinese visited Hong Kong from the mainland in 2021, compared to 51 million in 2018, government data showed.
After the second-quarter disappointment, analysts predicted little, if any, growth for the island’s GDP this year.
“Even if there’s a rebound in the second half of the year, it may not be able to pull the economy back to comfortable growth,” economist Gary Ng at Natixis bank said to the Financial Times.
Ng has predicted Hong Kong’s economy will flatline for the full year.
Iris Pang, chief China economist at ING, sees “close to zero growth” for the year.
“As long as the borders are not reopened, there will be limited investment,” she told the FT.
TREND FORECAST: As we had reported, Hong Kong’s earlier recession came in 2019 when prolonged, massive street protests against civil liberties roiled the city. And, the harder the government cracked down, the deeper the economy fell, scaring away visitors, investors… and everyday shoppers.
Following the lead of Beijing, the island imposed very strict mandates to fight the COVID War and is one of the last places in the world still requiring that arriving international visitors quarantine, including those from mainland China. Indeed, travel from China into Hong Kong before the civil tensions erupted in 2019 and before the COVID War was launched, hit 51 million according to the official data reported in the Financial Times. Last year, just 65,000 people from the mainland visited Hong Kong.
With many businesses abandoning Hong Kong for the mainland and other Asian countries—and with public repression now the Chinese Way—the once booming Hong Kong will continue to float down.