BUSINESS NEWS
Workers are waking up to a rare phenomenon -
the prospect of joblessness, writes Mark Graham
in Hong Kong
©
Disenchanted: Ng
Yan-kwong pines for the
good old days
Jobs swept away as
recession rips into Hong
Kong economy
HONG KONG has so far been spared the often-devastating summer typhoons that regularly wreak havoc in the region. Instead, another equally unpredictable phenomenon - unemployment - is scything its way through the economy, culling blue-collar workers and office staff alike.
The notion of being out of work is alien and unfamiliar to the generation of Hong Kong people who entered the workforce during two decades of sustained and often aggressive growth. Until this summer, the former British colony looked as if it might escape the worst ravages of the Asian financial crisis, shielded by its legendary flexibility, efficiency and transparency.
But Hong Kong has been dragged belatedly from the spectator stands into the fray of the recession. Jobless figures are climbing steadily and inexorably, and are predicted by more pessimistic analysts to hit 7%, a chilling prospect for families who rely on combined husband-and-wife incomes to pay hefty mortgages.
Current figures show that a total of 161,000 of the 3.34m workforce are jobless. At 4.8%, this is more than double the unemployment rate at the time of Hong Kong's handover last year to China.
At one jobcentre last week 60 people were waiting for its doors to open, reflecting the seriousness of the daily lay-offs at hotels, department stores, telecommunications firms, stockbrokers and estate agencies.
Ng Yan-kwong, 44, a construction worker, could rake in more than £100 a day during the glory years; now he would accept a third that wage just to have the dignity of a job. Signing on the dole is not a realistic option in a city where unemployment benefits are minimal and the face-loss factor crucially important.
"It is a complicated procedure just to prove you are penniless," says Ng. "We construction workers are proud people. We don't want to lose our pride for a pittance. And once you receive it, you cannot even do any odd jobs, which would make you lazy.
"Before, employees could pick and choose jobs easily. All the problems started after the handover. I don't understand politics, but I do know that when we were ruled by the British I had a lot of work to do and was earning a lot of money. Now, I wonder how the government has enough face to face the world, since people are becoming poor under the rule of their own people.
"The new government says a lot and does nothing. The so-called consultants around Tung Chee-hwa [Hong Kong's chief executive] are the dregs the previous British government refused to use. Now, the new government picks them up and they have started to harm everybody."
Little has gone right for the Special Administrative Region government since the handover in June last year. A stock-market crash in which the Hang Seng index fell perilously close to the 7,000 mark recently, down from 16,000 a year ago, was followed by a sharp fall in property prices.
Tourism has also taken a battering. In the boom times, the omnipresent designer stores and swanky shopping malls were swamped with spendthrift visitors from Japan, South Korea, Thailand and Indonesia. Cash-strapped Asians are now more likely to spend their yen, won, baht and rupiah in their own back yards.
The knock-on effect in Hong Kong is writ large for all to see. There are bargains galore and closures aplenty, including 23 of the 32 clothing stores operated by Theme, a home-grown retailer. Another boutique chain gave shop assistants a stark choice: take a wage cut or get the sack.
Guest-starved hotels have reacted by offering attractive room deals and laying off staff. One three-star hotel in the Wan Chai district took the novel approach of threatening to slash wages by up to 20% unless staff brought in more friends and relatives to eat and drink.
Andy Xie, a Morgan Stanley economist, says: "The laying-off of workers in the construction, hotel and retail industries is just the start. In the second half of this year more white-collar workers will be laid off. Once that happens people's income and cash stocks will dry up. I think it will last for a while: the economy is not expanding and is not likely to expand before the year 2000, perhaps later than that."
Even Hong Kong's free-spenders are counting the pennies. Loi Lam's Sha Kiu restaurant, which is only accessible by boat, is a favourite for pleasure-junk owners and tycoons out for a cruise on their motor yachts. The average per-head bill has dropped from £40 to £25 since the crisis began.
Loi, who was raised in Lancashire, says: "People are spending less and going out less. In the past people never watched where the money went; now they are saving up for a rainy day."
Government measures intended to stimulate the economy, including bringing forward big building and road projects, have had no noticeable benefit. Energies, in the past few weeks, have been concentrated on propping up the stock market, a move that has been widely criticised.
Nine days ago the government waded into the market to buy shares, supposedly to warn off speculators, yet this has only encouraged observers to think the unthinkable: that Hong Kong's precious peg to the dollar might go. If it does or even if fears grow that it will, there will be huge flight of capital, wreaking yet more damage on the economy.
The well-off middle classes are bracing themselves for the threat of job losses later this year, as the recession gnaws deeper into the economy. A get-well-soon prognosis is almost impossible to find.
Guonan Ma of Salomon Smith Barney says: "Hong Kong has a small government and there is a limit as to what it can do. It is dictated by market forces and external factors."
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