Lam promises more economic stimulus amid record decline in HK retail sales

Hong Kong

HONG Kong's leader pledged more relief measures in the wake of data showing that the city's unrest drove a record decline in retail sales.

Hong Kong Chief Executive Carrie Lam told reporters on Tuesday that the government would soon announce new moves to prop up the city's flagging economy after almost six months of protests and political strife.

She did not say what the measures would entail, saying only that they would be "targeted".

October retail sales contracted 24.3 per cent by value year on year, the fourth month of double-digit declines.

On Monday, Financial Secretary Paul Chan told lawmakers that he expected the first fiscal year budget deficit since the early 2000s, and said that the turmoil has dragged down economic growth by some 2 percentage points this year.

Protesters and police again clashed over the weekend, following a lull in violence surrounding local elections in which pro-democracy candidates secured a landslide win.

On the latest scuffles between protesters and police, Mrs Lam said: "It has poured cold water on our hope that there can be a way to stop such violence, so that our economy can have a chance of revival. I hope very much that violence will stop as soon as possible."

She said the new round of economic stimulus measures would be aimed at sectors that have been "particularly challenged" through the unrest.

"Overall, the way to do it is to be targeted," she said, adding that all departments would be involved.

The new effort would follow previous stimulus measures, including a HK$19 billion (US$2.4 billion) package in August.

In October, Mrs Lam added another HK$2 billion in economic support and announced a raft of new polices, including loosened mortgage rules, compulsory land purchases for housing, cash for students and increased subsidies for low-income families.

Chinese President Xi Jinping and other officials in Beijing have repeatedly reaffirmed support for her government, despite her historically low poll numbers.

On Tuesday, she declined to answer questions about whether she would consider meeting further protester demands, such as calls for an independent commission of inquiry into the causes of the unrest and alleged police abuses.

She also condemned US legislation supporting Hong Kong's protesters as unnecessary and unwarranted.

"It creates an unstable and uncertain environment," she said, adding that Hong Kong would follow Beijing's lead on instituting countermeasures to retaliate against the action. BLOOMBERG