In February, as Hong Kong was beginning to feel the grip of its first wave of coronavirus infections, 33-year-old Albert Chen and his father, Tim, sat down to discuss the dire state of their family’s outdoor furniture business as the pandemic took hold.
“We were thinking of different ways to survive in this economy and dad suggested we buy mask-making machines in Taiwan, where we’re from, install them in Hong Kong, and have [them] run by our staff here.”
At the time, demand for protective gear was high in the face of a global shortage. The prices of the machines his father wanted to buy were about twice as much as they normally were.
“I remember my first reaction was” ‘Are you crazy?’”
Chen says he assumed COVID-19 would be similar to the SARS epidemic that swept through southern China in 2003, causing just a fraction of the global infections and deaths the latest pandemic has, and ending within a few months.
“‘Why would you invest all that money?’” Chen asked his father. “I was worried about it. I said: ‘What if COVID ends soon? What are you going to do?’”
His father ignored Chen’s protests, and a month after Tim Chen decided to go ahead with mask manufacturing, the World Health Organization (WHO) declared COVID-19 a pandemic. The disease was spreading quickly throughout Asia and the world, undermining entire industries and sending the global economy into turmoil.
COVID lockdowns to contain the local outbreak dealt a devastating blow to Hong Kong businesses, which had already been brought to their knees by six months of anti-government protests. That plus the effects of the US-China trade war pushed Hong Kong into its first recession in a decade. The economy shrank by 3.5 percent in the third quarter from a year earlier, its fifth straight contraction.
There are more than 340,000 small- and medium-sized enterprises (SMEs) in Hong Kong, altogether employing 1.2 million people, or about 45 percent of Hong Kong’s total private-sector workforce, according to official statistics.
According to Hong Kong’s Trade and Industry Department (TID): “[SMEs] vitality and business performance are of crucial importance to the development of our economy.”
The TID’s senior information officer, Vivien Chen, told Al Jazeera that it is difficult to measure the effect of the pandemic on Hong Kong’s SMEs because it is still ongoing,
But, she says, it is clear that “Hong Kong’s economy has been severely hit by social unrest, the pandemic and international political situations.” In fact, total retail sales in the first 10 months of 2020 shrank by 27 percent compared with the same period last year.
To help businesses “cope with the pressure brought about by the economic downturn and alleviate their burden”, the government allocated more than 300 billion Hong Kong dollars ($38.7bn) in four rounds of funds and relief packages, the fourth round having been approved on December 21.