People send money to stimulate the economy? Scholars: Citizens May Not Consume Government for "Atonement"

Financial news

Written by: Xu Shihao

2020-02-26 18:33

In the past six months, the hardest hit industries were retail and catering. The government announced that "the people will send money" for 10,000 yuan. After the epidemic, the government will encourage citizens to spend and support the economy. But if citizens have more money in their pockets, will it increase consumption?

In the past, the government repeatedly opposed money. Chen Maobo pointed out that the reason for changing his mind was because after the social incident and the outbreak of the "new crown pneumonia" epidemic, the citizens kept reducing supplies and the income of many people. Therefore, they decided to stay at a difficult time. More money is in the pockets of the citizens. I hope that after the epidemic, the citizens will be encouraged to spend and support the economy.

If we assume that all citizens use 10,000 yuan for consumption rather than savings or investment, the total value of retail sales in Hong Kong last year was 431.2 billion yuan. According to a rough calculation, if the amount of money allocated is used for consumption, it is indeed true. Can contribute about 16% of total retail sales.

Li Zhaobo believes that the government uses money for "atonement" more than to stimulate the economy. (Profile picture)

Li Zhaobo, Co-Director of CUHK International Trade and Chinese Enterprise Course and Senior Lecturer of the School of Accounting, said that in the short term, sending money plus tax refunds will indeed stimulate the economy, but in the current economic environment, will citizens use the money for consumption? It became a question, "The tax refund is not a direct refund of money, but a one-year tax deduction, which is psychologically happy. Many friends around me talk, have money to bury it, and leave it for the appropriate time."

He believes that this time the government sent money for "atonement" more than to stimulate the economy. "Hong Kong has become a puppet, and class officials have a lot of responsibilities. This time puppets are also under great pressure. The economic environment is very poor according to their families. Hong Kong "Everyone is affected, or the labor force is reduced." He believes that the government should pay more than 20,000 yuan.

Under the influence of the epidemic, the retail and catering industries in Hong Kong have been hit hard. (Profile picture)

As for the role of "consumer coupons" in stimulating the economy, is it greater than sending money? Li Zhaobo pointed out that the help is indeed greater, but the "consumer voucher" is controversial, and "the retail industry has made pork and meat in the past few years." In addition, online shopping is also very convenient and cheaper. He hopes that the relevant industries themselves must find ways to save themselves. Ask the government for help.

In addition, he criticized that the "new philosophy of financial management" proposed by Chief Executive Lin Zheng Yue'e at the beginning of his tenure was nonsense. The so-called philosophy is "same for a while", and the budget is short, medium, and long-term policies. Long-term measures should include medical care, education, and services for the elderly. "Like the $ 70 billion Hospital Authority, are there indicators to improve efficiency and services?"

The actual effect of Xue Junsheng's assignment of money on the economy depends on when the citizens collect money. (Profile picture)

Xue Junsheng, chief economist of Hang Seng Bank (0011), also pointed out that sending money will help economic growth a little, but the actual effect depends on the time when the people receive the money. "Receiving money will buy daily necessities." The amount of 10,000 yuan is not much. At present, the unemployment rate is rising and the income is decreasing. Not all the money will be used for consumption. "

He estimates that if 450 billion yuan of 70 billion yuan is used for consumption, it will have a positive impact on economic growth by 1 percentage point. However, the current external economic environment is deteriorating. Even if there is no epidemic, the market expects China and the peripheral economy. The slowdown makes it difficult for Hong Kong to survive on its own. The epidemic has affected the industrial chain and dragged down global trade. Therefore, it is estimated that Hong Kong's economy may contract by 1.5% this year.

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