Hong Kong, An Economy Hanging In Balance Due To Coronavirus
Before even the smoke of a protracted political uprising cools down, the economy of Hong Kong faces a new threat. The coronavirus that is causing havoc in mainland China is posing a risk to Hong Kong’s economic stability. Paul Chan, the financial secretary of Hong Kong, expressed fears that the economy will contract further.
A Political Uprising Preceding Further Disaster
An extradition bill geared at harmonizing anti-fugitive ordinance with mainland China sparked protests in the third quarter of 2019. The result of this was a third economic recession since the island reverted to Chinese rule. The British handed back governance of the island to China in 1997.
While the anti-government sentiments are yet to cool down completely, Hong Kong experienced less of them since the start of 2020. Economy news analysts had forecast that the economy of Hong Kong would take time to recover. Going into 2020, the overall sentiment was that this would likely be a year for the recovery to start.
The Lethal Coronavirus And Its Shocking Numbers
The outbreak of the coronavirus has, however, brought a new twist to all these. While the island has not reported any deaths so far, it has confirmed 15 infections. As of Saturday, the number of infections stood at 14,380 in China. On the other hand, the number of deaths shot up to 304 within two weeks of the outbreak.
All eyes are now on Hong Kong, which is a vital pillar of the Chinese economy. Experts are anticipating more cases of infection on the island. The rapid migration between the two territories is fueling the fear that the outbreak will spread further. A look at a previous disease outbreak – SARS in 2002-2003 is evidence that this new outbreak will affect Hong Kong adversely.
During the SARS outbreak period, Hong Kong reported 280 deaths from the disease, which is also in the coronavirus family. This number was the highest per capita deaths of any other nation in the world. The effect of the virus was not only restricted to the number of fatalities but an economic recession as well.
A Tough Economic Time With Good Rewards
The economy of Hong Kong shrunk during this period, and it became heavily reliant on mainland China. During this period, the rate of unemployment grew at an estimated 6% rate year on year. Both Hong Kong and China agreed to retain their exchange rates with the US dollar. Many countries around the world chose to devalue. Many economic news experts review this as a positive that helped Hong Kong bounce back.
In the years that followed the end of the SARS virus, mainland China became dependent on Hong Kong for economic growth. The mystery remains whether the coronavirus will have the same effect on Hong Kong and China.
Mainland China spent a large part of 2019 in a tense tug of war with the USA due to a trade war between the two countries. Hong Kong, on the other hand, experienced a political uprising for the better part of the second half of the year. Both of these factors affected the economies of both Hong Kong and China. The coronavirus outbreak spells further doom for the two.
Predicting whether health workers will contain the disease in good time is hard. However, for effect on the economies of these two places, history suggests that hard times are near.
