(Bloomberg) — Hong Kong’s leader is expected to lay out a policy agenda aimed at boosting the city’s economy, including a possible liquor tax cut, during his third annual speech on Wednesday.
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Chief Executive John Lee will deliver the speech at the Legislative Council at 11am on the theme: “Reform to improve development and build our future together.”
Lee has set his sights on boosting the nearly $400 billion economy after strengthening Beijing’s authority over the former British colony with a national security law, a move Western governments criticized for restricting open debate in Asia’s financial hub. gagged.
The city’s economy has grown within the official forecast range of 2.5% to 3.5% in the first six months on strong exports, although falling property prices and sluggish consumption have dampened sentiment.
In an effort to burnish its reputation as a premier nightlife and dining destination, Hong Kong plans to cut liquor taxes, Bloomberg News previously reported. If implemented, this measure could help revive sales for restaurants and retailers struggling with the decline in consumption, which accounts for more than half of economic growth.
China’s slowdown and geopolitical uncertainties are also casting a shadow on Hong Kong’s growth prospects. Beijing’s recent stimulus measures, along with interest rate cuts by the US Federal Reserve, may provide some relief.
To support the real estate market, Lee’s government last year removed most restrictions on home purchases and cut taxes on property purchases. Prices rose slightly earlier this year before falling further to their lowest level since 2016.
A wave of bankruptcies points to eroding corporate finances. Retail sales and tourist arrivals remain below pre-pandemic levels, a period when the city’s image took a hit from draconian quarantine measures and a crackdown on pro-democracy political opposition.
According to the South China Morning Post, Lee will try to attract more investors by renewing a HK$2 billion ($258 million) Innovation and Technology Venture Fund. The newspaper, citing unidentified sources, also reported additional measures to diversify the economy, including boosting the medical and biotechnology sectors.
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