01 point of view
Written by: Review Editor Room
2020-06-21 08:00Last update date: 2020-06-21 08:00
The government's cash distribution plan began accepting applications on Sunday (21st). According to the authorities' expectations, 7 million citizens will be eligible for the plan, involving a total of 80 billion yuan in public funds. However, due to the economic downturn and the unknown epidemic situation, even if the citizens have more than 10,000 yuan in pockets, they will only use part of the money for consumption due to the need of Jigu to prevent hunger, so that the strength of the economic stimulus is discounted, so the government needs to track The effectiveness of the plan must be conceived and other economic stimulus policies must be prepared in advance to prevent it from being necessary.
With 10,000 yuan allocated, 21 banks participated in the cash distribution plan. (Profile picture/Photo by Wu Zhongkun)
To hedge against the economic impact of the new crown pneumonia, the SAR government will accept the public to apply for 10,000 yuan in cash on Father's Day. Many people in the industry will also introduce discounts or concessions in order to attract "10,000 customers". For example, Mr. Zhang Yuren, a member of the catering industry of the Legislative Council, said that in order to encourage people to stay in Hong Kong for consumption, there will be over 1,000 restaurants in the industry that will offer "30% off in July and 20% off in August" in the evening market, hoping to help the catering industry "35 billion yuan" to keep the jobs of workers in the industry; Mr. Shao Jiahui, a member of the retail industry, also said that the retail industry is considering using coupons and other methods to attract.
From the policy intent, if the public charges 10,000 yuan for all consumption, the "multiple effect" of the government's 80 billion public funds will naturally stimulate the economy, but this is not the case. Since the outbreak, the unemployment rate in Hong Kong has recently climbed to 5.9% and has surpassed the level of the financial tsunami. Construction, retail, logistics and tourism are the hardest hit areas. The Secretary for Labour and Welfare, Luo Zhiguang, made it clear that the unemployment rate in the second quarter announced next month is more likely to rise to more than 6%. At the same time, even though the outbreak in Hong Kong seems to be out of danger and economic activity is gradually returning to normal, the new virus is still circulating in many countries and vaccine development work is progressing slowly, so the situation in the next few months is hard to say.
Whether the government and the industry can start wishful thinking depends on the following factors. First of all, under the economic downturn and the unstable job market, the citizens usually don’t spend all of them at will, buying new consumer goods, but instead tend to save some of their extra income, or pay for recurrent expenses, and use Jigu to prevent hunger; Secondly, compared with the American “Moonlight” consumer culture, Asians’ savings concepts and proportions have always been stronger than in Western countries, resulting in a limited role for all people to send money. Finally, if the public spends 10,000 yuan on online shopping on foreign websites , Will not have much effect on the local economy.
Even though it is too early to deduce the effectiveness of the policy, the experience of the Hong Kong government in distributing money in 2011 also has implications. According to a survey by the Hong Kong Research Association, as many as 35% of the respondents in that year expected that the main use of the 6,000 yuan was for savings, another 11% would be used for investment, and only 22% indicated that they would be used for consumption . More importantly, the then Financial Secretary, Zeng Junhua, found that the macroeconomic environment of Jinshi was still a post-financial tsunami period, but the impact of the subprime crisis on Hong Kong’s economy must not be equated with today’s. In view of the current severe challenges, I believe that the public will be more conservative and stable when using 10,000 yuan.
If the faction finds that gold is not very helpful to the economy, what other axes of the Hong Kong government can stimulate the economy? The answer may be in the coupon. Consumption vouchers are used as a voucher for money transactions. Although their purpose is to promote consumption, but because vouchers do not have a saving function, in addition to being unable to redeem cash, citizens must also use it within a specified period. Therefore, the effectiveness of stimulating the economy must be great Direct payment of cash. The discussion of consumer vouchers has been conceived for many years. The reason is not only that the administrative costs are too high, that is, the merchants have to redeem and vouch for the difficulty of redemption and transaction after receiving the vouchers, but also limit the consumption options, so that the public can not be used to pay Urgent expenses such as rent and transportation expenses. But as mentioned above, even if the process of claiming 10,000 yuan begins, the Hong Kong government can try to use technology to overcome the technical difficulties of finding and renewing vouchers when electronic wallets become popular. After all, the economic risks posed by the new coronary pneumonia have not been encountered for many years, and the policies to revitalize the economy cannot be over.
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