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Hong Kong March retail sales fall 2.9% as tourism takes hit
[HONG KONG] Hong Kong retail sales fell 2.9 per cent by value in March from a year earlier, underscoring the impact of a drop in mainland Chinese tourists and tighter visa rules on residents from Shenzhen who visit the Asia financial centre.
China last month limited the number of visits that residents from the city just across the border can make to Hong Kong in a bid to ease the flow of mainland visitors following protests and clashes that have stirred up tensions.
Chinese authorities also aim to reduce import taxes on certain unspecified import goods before the end of June to help boost domestic spending at a time when the economy is slowing.
For the first quarter of 2015, the value of retail sales fell 2.3 per cent from a year earlier, while the volume of retail sales was virtually unchanged over that period.
For March, retail sales fell to HK$38.4 billion (S$6.61 billion) but climbed 0.8 percent by volume.
That followed a 4.9 per cent rise in retail sales value in February, lifted by the Chinese New Year holiday, and a 14.5 per cent drop in January in the most marked drop since 2003. "Most types of retail outlets recorded year-on-year declines in sales, conceivably reflecting the slowdown in inbound tourism," the government said in a statement. "The retail sales performance in the near term is likely to be constrained by the weaker performance of inbound tourism." Sales of jewellery, watches and clocks fell 18.6 per cent by value in March compared with a 9.2 per cent decline in February and a 21.4 per cent drop in January. They dropped 16.6 per cent for the first quarter, against a 1.0 per cent rise for the same quarter a year earlier.
Some watch sellers in Hong Kong are scaling back operations amid sluggish business due to a crackdown on corruption launched by Chinese President Xi Jinping and a drop in tourist arrivals. Some retailers are asking for discount of up 40 per cent before renewing their leases, according to some property consultants.
Travel industry executives say political tension in Hong Kong, including democracy demonstrations and protests against mainland shoppers, in which some people have been harassed, have discouraged mainland tourists. Some of them avoid Hong Kong and shop elsewhere tapping the weak currencies there.