Recent Political Risk Looming Over Hong Kong
First of all, given Hong Kong's unique geographical location, Hong Kong has been widely treated as a stepping stone for investing into China. However, the markets and economy of Hong Kong have been hit especially in the second quarter due to the US-China trade war and the anti-government protests recently happens in Hong Kong. Tourism, food, retail, trade, logistics and other industries have been seriously affected.
In response to the weak economy, Hong Kong government has announced a number of relief measures in recent days, with policies targeting small and medium enterprises, students and low-income families. To be specific, the government's measures include waiving 27 groups of 12 months' government fees and charges for SMEs who engages in marine, logistics, retail, catering, tourism, construction, fishing and animal husbandry; reducing rents for most short-term tenancies of government land which are used for community and business purpose for 6 months; implementing a fee review moratorium on government fees and charges; and enhancing two government funds on branding, upgrading, domestic sales, and export marketing further. In addition, the finance secretary introduced a new loan guarantee product under the SME Financing Guarantee Scheme (SFGS) where a 90 percent guarantee for approved loans has provided for SMEs. There are also seven measures to ease people's burdens, including a further reduction in salaries tax for 2018-19 from 75 per cent to 100 percent while retaining the ceiling of HK$20,000(2).