The United States has repeatedly increased the taxation of small and medium-sized enterprises in Hong Kong.
The Sino-US trade war is heating up again, and it is difficult for Hong Kong to be independent. In particular, the United States is adding a 25% tariff on US$50 billion worth of Chinese goods; another 10% tariff is being added to US$200 billion, and as Trump’s tweet says, the 10% tax rate will be adjusted this Friday. It rose to 25%; it even threatened to cut the remaining US$325 billion in Chinese goods that had not yet imposed punitive tariffs in the short term. As a result, Hong Kong SMEs have been complaining about the situation. The Hong Kong Government, as the Financial Secretary has pointed out, is prepared for various situations. Although the relevant industries will be affected, the actual risks are still manageable.
SMEs wait for Sino-US consultation results
Mai Meiyi, president of the Hong Kong Small and Medium Enterprises Association, said that the United States’ 25% tariff is not said today. Many companies were afraid at the beginning, but many companies have long taken measures to expand other routes and plans such as transferring factories. It means that the initial 10% tariff is shared by the manufacturer and the buyer respectively. In fact, the problem is not big.
In view of the current development, she pointed out that although the government has some measures to ensure exports, the most serious thing is that the current situation of non-stop orders is immediately suspended. It means that in the absence of business, even if the government does more, it may not be effective immediately. She also said that there are some traditional manufacturers who are facing a dilemma. Because the United States has to face tariffs imposed by the United States, some enterprises intend to move away from the Dawan District, and they have to face various problems such as language and system when moving abroad.
Mai Meiyi believes that Sino-US trade frictions are quite extensive. So far, the market atmosphere is quiet, some companies are afraid to ship, and some companies are watching the changes, which is much less than before. She said that the trade war affects the business of small and medium-sized enterprises in Hong Kong is an “inevitable fact”. Therefore, we can only wait for the results of the consultations between China and the United States.
Chen Wei, president of the Hong Kong Electroplating Industry Chamber of Commerce, said that if the United States raises tariffs, the electroplating industry that is engaged in the surface treatment of downstream accessory products will not be spared and will “seriously affect our orders.” He did not specifically refer to how many manufacturers will be affected once implemented, only to say that “it is really not a minority”, because US orders are generally larger, especially those engaged in surface treatment are generally small profits but quick turnover and adopting economies of scale business model, so The impact will be great.
Wu Tianhai: Retail industry is expected to continue to weaken
Affected by the trade war, the stock market is weak, the wealth effect and consumer confidence are also weakening, and the retail industry in Hong Kong may continue to be weak. Wu Tianhai, chairman and managing director of Wharf Real Estate (1997), said at the shareholders meeting yesterday that the market has not been as strong as last year for more than four months. The overall retail sales in the first quarter of this year were much weaker than the same period last year, and even went backwards. Its Harbour City in Tsim Sha Tsui has outperformed the market, and the retail sales have increased in number of units, but the market will eventually be affected by the slowdown. In the other major shopping mall of Jiulong, Causeway Bay Times Square, under the changing competitive environment, the overall market performance is worse than that of Tsim Sha Tsui. It is only similar to the trend of the market. He mentioned that the friction situation between China and the United States is once again vague, how long it will last and its degree of impact on consumption and the economy.
Wu Tianhai continued that last year, the mall contributed more than 60% of the company’s profits, and the mall is still the most important business. In the future, it is hoped that the rent will increase with the market. He also said that there are considerations for residential renovation projects, but there are no specific plans for the time being. The company’s retained earnings will be used primarily for debt reduction, and then find suitable investment opportunities.