Hong Kong’s Chief Executive Carrie Lam has said that the government is looking at special measures on insurance to help businesses hard hit by months of street clashes.
Ms Lam, who was attending a business luncheon last Thursday, was told by a businessman who is engaged in the retail sector that as soon as the government declared the protests a riot, his company’s insurance was invalidated. In addition, a landlord had told the company to buy additional insurance of HK$10m ($1.3m) to protect the interests of the former.
Ms Lam responded, “As far as the issue of insurance (is concerned), in fact, one of these chain businesses wrote to us about the problem of insurance,and I have asked the Secretary for Financial Services and the Treasury to examine it to see what special measures we could put in place, because when we said that we are facing some unprecedented circumstances, these do warrant exceptional measures.
“If we still act exactly in the same conventional mode as if business is usual, life is normal, then we are not being very responsible. So I can assure you that I’ve been impressing upon my colleagues and working with my colleagues that we are facing some exceptional times that call for exceptional responses from the government.”
Hong Kong has been hit by street protests since June with demonstrators clashing with the police. Commenting on the implications for the economy, Ms Lam said during her luncheon address, “While external uncertainties have brought up immense pressure, I would say that the local situation is much more worrying. Hong Kong has proven time and again that we can withstand external economic shocks, be it the Asian financial crisis in the late 1990s or the financial tsunami 10 years ago, but then what is happening in Hong Kong now is unprecedented. From being one of the safest cities in the world, there have been extensive conflicts and violence in various districts in Hong Kong over the past four months.
“A handful of rioters initiated attacks and sabotages in an organised and planned manner. They doxxed and beat people holding different views, vandalised public facilities, set fires in MTR stations and shops, and hurled petrol bombs at police officers, spreading chaos and fear in Hong Kong and seriously disrupting people’s daily lives.“Inevitably, the economy will be hard hit. Surveys showed that local business sentiment has turned extremely pessimistic in recent months. The impact is most obvious in some of the services industry. Visitor arrivals started to fall since the middle of July, followed by a widening drop of 30 to 40% in August and September. In the first half of October, the drop was about 50%. Retail sales volume showed an enlarged fall of 25% in August compared to last year. The catering industry is also hard hit and hundreds of restaurants may have to be closed if the situation persists. All these figures are very alarming, especially if you consider the fact that these relevant industries now employ some 600,000 people.”
Due to the economic challenges ahead, the Financial Secretary has announced in the past three months, a wide range of initiatives to support enterprises, safeguard jobs and stabilise the economy. In all, the various recovery measures involving a total of HK$64bn are expected to provide a 2 percentage point impetus to the economy which has slipped into recession.