Hong Kong companies shut store as metropolis struggles to revive publish pandemic By Reuters

By Jessie Pang, Joyce Zhou and Edward Cho

HONG KONG (Reuters) – When Jacky Yu, 48, opened his Japanese present store in Hong Kong greater than a decade in the past, the vacationer and procuring district of Mong Kok was a bustling hub filled with stalls, avenue meals and vacationers.

Quick-forward 12 years and components of the world are struggling to remain afloat, a mix of consumers emigrating, locals heading throughout the border to buy in China or travelling to Japan to profit from a weak yen – and a dearth of vacationers.

Yu says he is needed to make the “heartbreaking” resolution to shut his retailer and transfer it on-line.

“I nearly wish to cry once I speak about it,” stated Yu, packing his unsold stationery and toys into storage bins.

“There are only a few vacationers on the streets, even the mainland Chinese language are only a few.”

Hong Kong is struggling to get well for the reason that COVID pandemic, which noticed many expatiates depart after a 3 yr shutdown, and vacationer numbers dwindle to a fraction of pre-pandemic ranges. Excessive rents and a labour scarcity are actually including to the ache.

Companies describe procuring malls as “useless”, with low foot site visitors and retailers lined with “for lease” or “arising quickly” indicators.

Edmund Wong, an accountancy sector lawmaker, informed town’s legislature final Friday that greater than 20,000 firms had deregistered within the first quarter of 2024, up greater than 70% from the identical interval final yr.

Simon Wong, president of the Hong Kong Federation of Eating places and Associated Trades, informed public broadcaster RTHK that he estimated round 200-300 eating places had closed over the previous month, a development he expects to proceed.

On Tuesday, Hong Kong chief John Lee performed down considerations about companies closing.

“The world is at all times altering, and completely different industries might want to adapt, so there will likely be operators who aren’t so profitable however new-comers are entering into the market.”

Even with the Golden Week vacation beginning on Wednesday, a historically busy time for procuring and leisure, many companies aren’t optimistic.

“I don’t assume the Golden Week will assist a lot,” stated Wendy, 54, who works at a noodle store in Mong Kok’s Girls Market.

“There have been many vacationers on this avenue … however they’re gone now.”

Hong Kong residents are additionally deserting native retailers and more and more travelling throughout the border to the southern Chinese language metropolis of Shenzhen for meals and leisure, the place they are saying costs and repair are higher.

“Hong Kong individuals are heading north to devour, which has change into a transparent development. On weekends, many Hong Kong folks go to Shenzhen for consumption,” stated Ting Lu, chief China economist at Nomura based mostly in Hong Kong.

“The reason being that previously 5 years, costs in Shenzhen, Guangzhou, and even Changsha have hardly modified a lot. However in Hong Kong … We now have discovered that the worth distinction has widened, which has inspired Hong Kong folks to go north for consumption.”

After Hong Kong reopened its border post-pandemic with China final yr, the Tourism Board recorded a 38.9% drop in mainland guests in 2023, in contrast with 2019 earlier than the pandemic.

Spending by same-day mainland vacationers plunged 36.4% in 2023, dropping from a median of HK$2,200 per individual in 2019 to HK$1,400 after the border reopened final yr.

Within the Hong Kong border city of Sheung Shui, the place residents as soon as used to complain about mainland Chinese language overcrowding the city and pushing up rents as they flocked to purchase every little thing from cosmetics and medication to day by day requirements, enterprise is quiet.

Li, 30, a beauty store keeper from Sheung Shui, stated native shoppers now tended to buy throughout the border in Shenzhen and the “the low season” had now come earlier.

Lee, 35, a hamburger shopkeeper in Mong Kok district, stated enterprise had worsened for the reason that border reopened.

“There isn’t a one after eight o’clock, and it’s even scarier in the course of the holidays. There are not any vacationers. Similar to the previous Easter holidays, we may sit and sleep right here for 3 hours.”