Hong Kong to provide 2nd round of financial aid to companies

Hong Kong

HONG Kong's government will introduce a second round of financial assistance for businesses affected by the novel coronavirus outbreak, according to Chief Secretary Matthew Cheung.

The subsidies from the Epidemic Prevention Fund would aim to protect workers, Mr Cheung wrote in a blog on Sunday that didn't provide details of the plan or a timeline. The government announced its first aid package related to the pandemic late last month to help businesses and individuals.

On Friday, the city's government imposed measures including banning public gatherings of more than four people and closing cinemas, gyms and arcades after it reported a surge in coronavirus cases. Thousands of people entered the city to avoid a March 19 government deadline that subjected all international arrivals to a 14-day self-quarantine. The influx has nearly quadrupled the number of Covid-19 infections in the city in the past two weeks.

The daily increase in new coronavirus cases had fallen to single-digit figures before the government announced the quarantine plans but have risen steadily in the past week. On Saturday, the number of infected people rose by more than 60 to a total of 582.

In response to the increase in cases, the government last week issued a 14-day ban on foreign non-residents entering the city. The number of arrivals plummeted to 5,297 on March 25, when Hong Kong tightened border controls, from 14,783 a day earlier, and dropped further to 4,033 on Friday, Mr Cheung said in his blog.

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Separately, Financial Secretary Paul Chan wrote in his blog on Sunday that the government was aware that its new rules would exacerbate the plight of small and medium-sized enterprises, and could increase the risk of layoffs and closures. He added it may not be possible for the city's economy to rebound as quickly as it did following the Sars epidemic in 2003.

The Epidemic Prevention Fund was set up to stabilise the challenges the economy faces, which could drag on for an extended period of time, the financial secretary wrote. Mr Chan said he expects a massive drop in retail sales figures, and that the virus threat will continue to be acute in the second quarter. BLOOMBERG