Hong Kong's Christmas cheer muted as spending falls, jobs lost

Merrymaking in Hong Kong this festive season looks set to be more muted, with some people opting for low-key celebrations instead of splashing out on Christmas and New Year.

Wiping out some of the December joy is Hong Kong's weak economy, which has entered a technical recession amid the government's struggle to cope with protests that have lasted more than six months.

With just a week to go before Christmas, English curriculum planner Morgan Lam, 34, finds it "odd" that the city is not festive.

"Perhaps it's due to the (anti-government) movement. Most shops do not even have Christmas decorations on," she said. Ms Lam, who lived in New York for almost two decades, will mark the festivities with her family in Hong Kong, where she now resides.

Instead of eating out, she plans to cook Christmas dinner.

A supporter of the anti-government movement, Ms Lam said she buys gifts only from shops that produce goods locally and also back the protesters.

"I actually spent more on gifts since most small local shops tend to have higher prices due to small production (volumes)," Ms Lam said.

She was planning to catch the annual New Year fireworks at Victoria Harbour, but yesterday, the Hong Kong Tourism Board, citing the threat posed by anti-government demonstrations, announced the cancellation of the fireworks display for the first time in its 10-year history. A Symphony Of Lights, a light show held daily at Victoria Harbour, will replace the fireworks display on New Year's Eve.

Still, some others, like Mr Sunny Tse, are surprised to find the Christmas vibe stronger this year. The 24-year-old, who works in media, said he sees "more and more Christmas sales and promotions" and that "the Christmas holiday seems to cool down the protests".

However, Mr Kwok Wang Hing, chairman of the Eating Establishment Employees General Union, said December spending at restaurants so far this year is half that of previous years. In Hong Kong, the winter solstice is the single day in December that rakes in some of the highest revenues for eateries. This year, it falls on Dec 22, but many restaurants say they have no bookings even though the event is less than a week away.

"Usually, families will dine out on winter solstice and restaurants will serve at least two rounds of customers in a night, but no one is booking," said Mr Kwok, adding that while more people have eaten out in the past two weeks, restaurants have had to shut by 9pm, instead of the usual 11pm, owing to the unrest.

Many restaurant owners are hoping the rough patch will blow over by March. If not, Mr Kwok said he expects more than 1,000 restaurants to fold.

The usually packed shopping belt in Causeway Bay was visibly quieter yesterday, with popular malls like Times Square relatively empty.

A Straits Times check around dinner time at popular roast goose restaurants Yat Lok and Yung Kee in Central as well as Lan Fong Yuen in Sheung Wan found that tables were readily available.

Hong Kong's overall unemployment rate has remained low but crept up to 3.2 per cent as of end November, with the jobless rate for the food and beverage sector hitting its highest level in more than eight years. In October, retail sales fell by 24.3 per cent from a year earlier, the fourth month of double-digit fall and the worst slump on record, the government said.

Last week, the city's key retailing group said more than one in 10 retailers in Hong Kong could close down in the next six months as the sometimes violent protests deter tourists from visiting.

This means that thousands of stores could shut down over the next six months and more than 5,600 retail jobs could be lost.

The Hong Kong Retail Management Association's chairman, Ms Annie Tse Yau, said that if cash flow does not improve and landlords do not pitch in to help smaller operators, there will be a wave of layoffs and business shutdowns that "will be the worst ever in history".

About 30 per cent of those polled by the association said they will cut jobs, while 43 per cent said they cannot continue to operate beyond six months. The survey sought views from 176 retailers, covering 4,310 stores and 89,700 employees.

Adding to the pressure is the plunge in visitors. Tourist arrivals slumped 56 per cent in November from a year ago to 2.65 million, said the Hong Kong Tourism Board. This is the sharpest fall since April 2003, when the city was devastated by the Sars (severe acute respiratory syndrome) epidemic.

The city's economy is in technical recession, with the government projecting an annual contraction of 1.3 per cent, dragged down by the protests and the US-China trade dispute. Financial Secretary Paul Chan had earlier warned of a fiscal-year budget deficit next year - the first since the early 2000s. He said the turmoil has dragged down economic growth by some 2 percentage points this year.