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Fire rages at an exit of the Hong Kong subway"s Central Station after radical protesters went on an arson spree in September. [Photo/China Daily]

Unemployment rises in food, tourism sectors as customer numbers dwindle due to violence

Ying, who is in her 40s, never thought she would lose her job, but then lingering social unrest rocked the city.

To support a family of five, Ying (not her real name) used to work as a waitress in a wonton noodle shop at the bustling Causeway Bay on Hong Kong Island. The busy traffic always brought dozens of customers, many of whom lined up outside the restaurant before it opened.

But now, since the commercial area has been the scene of several protests, the customers have gone. The noodle store had to shut down, and Ying had to pack up and go home.

"The owner decided to put up the shutters due to the social unrest, as the business cannot continue with less and less revenue," Ying said.

She said the food shop was able to keep its head above water in June when the protests had just begun, since revenue had dropped only 30 percent at that time.

At first she thought everything would be restored soon and visitors would be back to Hong Kong again. But the downturn did not stop and violence has continued, with this past weekend marking the 21st consecutive weekend of unrest.

The noodle store"s revenue eventually had declined 70 percent, and the owners could no longer afford the rent with so little income.

Ying is not the only victim. There are many others like her who have become jobless, as an increasing number of stores in the food and beverage sector are closing in the city

LH Group, which runs Japanese brand Gyu-Kaku and Chinese brand The Banqueting House, closed three dining places in a district that has suffered heavily from protests. The company has also shelved plans to open new noodle shops, Chairman and Chief Executive Simon Wong Kit-lung said on social media earlier this month.

According to the Hong Kong Federation of Restaurants and Related Trades, more than 200 restaurants had stopped doing businesses between June and September.

Data from the SAR government showed that business receipts of the food services industry decreased 4.6 percent from the first quarter to the second.

Following the closure of restaurants, unemployment in the consumption-and tourism-related segment has edged up.

Labor force statistics released on Oct 18 by the Hong Kong Census and Statistics Department showed that the unemployment rate of the retail, accommodations and food services sectors increased to 4.9 percent from July to September - the highest in more than two years - compared with figures from June to August.

In particular, the unemployment rate for the food and beverage service activities sector rose sharply to a six-year high of 6 percent."

"Weak local consumption and plunging visitor arrivals caused by local social incidents have continued to weigh on the labor market," said Law Chi-kwong, the SAR"s secretary for Labour and Welfare.

The overall unemployment rate stood at 2.9 percent for July to September, the same as that for June to August.

As of the end of the second quarter, total employment decreased 12,100 to 626,200, compared with the end of the first quarter. The government has not yet released third-quarter figures for different sectors.

Law believed worsened economic conditions will put increasing pressure on the labor market in the near term.

To counter the challenging economic environment, the government unveiled its third round of economic stimulus, worth HK$2 billion ($255 million), on Tuesday, targeting the retail, tourism, food and beverage and logistics industries.

Specific measures include granting a 50 percent rent subsidy for six months to retail shop owners and leisure facility operators whose businesses are located at properties owned by the city"s Lands Department, Leisure and Cultural Services Department or Government Property Agency.

Detailed measures to help the city"s tourism sector will be released after the government finishes consulting with the Hong Kong Tourism Board and Travel Industry Council of Hong Kong, according to Secretary for Commerce and Economic Development Edward Yau Tangwah.

Financial Secretary Paul Chan Mo-po said, "Though launching stimulus measures may increase the risk of running a government budget deficit, the government will make good use of its fiscal reserves to launch countercyclical measures to pull the local economy away from recession risks."

 

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