Hong Kong retail sales extended their freefall in November as months of pro-democracy protests scared off tourists, which affected spending and threatened the survival of small businesses.
Sales fell 23.6 percent from a year earlier to HK$30 billion (US$3.85 billion), Hong Kong government data showed yesterday.
It was the 10th consecutive month of declines and compared with a revised 24.4 percent drop in October, which was the steepest on record.
As protests spread across shopping districts in the territory, many retail operators, from prime shopping malls to family-run businesses, have been forced to close early or for entire days over the past few months.
In volume terms, retail sales fell 25.4 percent, compared with a revised 26.4 percent drop in October.
“The near-term outlook for the retail trade continues to hinge on how the local social incidents will evolve,” a government spokesman said. “As such, ending violence and restoring social order are essential to the recovery of the retail trade and indeed that of the whole economy.”
Hong Kong sank into recession for the first time in a decade in the third quarter last year as the protests plunged the city into its worst crisis since it reverted from British to Chinese rule in 1997.
Hong Kong Financial Secretary Paul Chan (陳茂波) on Sunday said that a contraction in the fourth quarter last year was “unavoidable” and that the budget next month would focus on boosting the economy.
Tourist arrivals in Hong Kong plunged 55.9 percent year-on-year in November last year, the steepest fall since May 2003, when the territory was hit by a SARS outbreak.
November tourist arrivals fell to 2.65 million, according to the Hong Kong Tourism Board.
That compared with a 43.7 percent plunge in October.
The number of mainland Chinese visitors fell 58.4 percent in November to 1.93 million, accounting for 72.8 percent of arrivals.
High-end retailers, who rely heavily on mainland Chinese spending, have been particularly hard hit.
Sales of jewelry, watches, clocks and valuable gifts plunged 43.5 percent year-on-year in November compared with a revised 43 percent drop in October, data showed.
Medicines and cosmetics fell 33.4 percent, while department store sales dropped 32.9 percent, data showed.
The Hong Kong Retail Management Association estimates that about 7,000 businesses, or more than one in 10 retailers, will be forced to close in the next six months.
The association has called for more government relief measures and urged landlords to cut rent.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
PRESSURE EXPECTED: The appreciation of the NT dollar reflected expectations that Washington would press Taiwan to boost its currency against the US dollar, dealers said Taiwan’s export-oriented semiconductor and auto part manufacturers are expecting their margins to be affected by large foreign exchange losses as the New Taiwan dollar continued to appreciate sharply against the US dollar yesterday. Among major semiconductor manufacturers, ASE Technology Holding Co (日月光), the world’s largest integrated circuit (IC) packaging and testing services provider, said that whenever the NT dollar rises NT$1 against the greenback, its gross margin is cut by about 1.5 percent. The NT dollar traded as strong as NT$29.59 per US dollar before trimming gains to close NT$0.919, or 2.96 percent, higher at NT$30.145 yesterday in Taipei trading
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