HK officials offer firms caught in US-China trade war and city protests fast tracked access to government funds worth up to HK$35 billion

05-Sep-2019 Intellasia | South China Morning Post | 6:02 AM Print This Post

Smaller firms in Hong Kong caught in the crossfire of city protests and the US-China trade war will have immediate access to funding worth up to HK$35 billion (US$4.5 billion), say senior officials.

Financial Secretary Paul Chan Mo-po and Secretary for Commerce and Economic Development Edward Yau Tang-wah said on Wednesday the “instant help” was for small and medium-sized firms struggling to raise capital, so they could “ride out the storm”.

The steps were unveiled at the government headquarters in Admiralty with Chief Executive Carrie Lam Cheng Yuet-ngor expected to announce the total withdrawal of the extradition bill, which she previously declared “dead”.

Under the funding proposals, the application process for fresh government cash was being streamlined for smaller companies facing a credit crunch.

There were about 40 government funds available with funding worth HK$35 billion up for grabs, Yau said at a press conference after the officials met 300 representatives from small and medium-sized businesses.

“The measures aim to help SMEs and micro enterprises, which told us they needed immediate access to fresh capital,” Yau said.

“We hope to help them ride out the storm.”

The moves were designed to throw a cash lifeline to smaller and even micro enterprises from going under, with restrictions relaxed to allow them to tap into government funds in a timely manner, Chan said.

“Many companies are experiencing a credit crunch and need instant help,” he said.

Lam’s expected full withdrawal of the bill would mean acceding to one of the five main demands of protesters, who have taken to the streets to vent their anger at the government over the past 13 weeks, in a movement sparked by the now-shelved extradition bill.

Asked about the Hong Kong demonstrations that have become increasingly violent, Chan said: “Stopping violence is our first priority.”

He added the protests in and around Hong Kong International Airport had blemished the city’s international image as a travel destination, with tourism arrivals in the final week of August down 45 per cent year-on-year.

Wednesday’s announcement from the economy officials followed a relief package worth HK$19.1 billion (US$2.4 billion) put forward on August 15, as the government downgraded its forecast for the city’s economic growth this year to anywhere between 0 and 1 per cent, from 2-3 per cent previously.

The latest measures include lifting the guarantee level of loans by the government-owned Hong Kong Mortgage Corporation to 90 per cent and the ceiling of loans to HK$6 million.

Another measure sees the government offer subsidies upfront for companies attempting to expand into overseas markets, instead of reimbursing them after they made the investments.

The announcement came as Hong Kong also continued to be stung by the US-China trade war.

Washington’s retaliatory tariffs 15 per cent on $300 billion worth of Chinese goods started in stages on Sunday, with the remainder due to take effect on December 15.

It has yet to reveal the implementation date of the 30 per cent tariffs on $250 billion worth of Chinese goods.

China’s levy of 5-10 per cent tariffs on $75 billion worth of American products took effect on Sunday.


Category: Hong Kong

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