Four out of ten (42%) SMEs and a quarter (24%) of large corporations fear they will only be able to survive for up to six months due to the ongoing Covid-19 crisis without further relief measures from the government, according to Hong Kong General Chamber of Commerce (HKGCC)'s latest survey.
Conversely, 28% of SMEs and 45% of large corporations believe their business can survive without further assistance from the government.
The survey showed that SMEs are suffering the most, with 60% of companies who have seen turnover drop by half being SMEs, compared to 29% for large companies. Respondents cited “business partners in financial difficulty” and “uncertainty arising from foreign sanctions” as the two key challenges they were facing.
SMEs were being more affected than large businesses by “insufficient cash flow” and “being forced to suspend operation due to insufficient business volume".
The survey of HKGCC members on their expectations for the upcoming policy address and government relief measures, conducted between 11-15 August, also revealed that 36% of respondents said their turnover had plunged by at least half, compared to pre-Covid-19 levels.
“The SME sector is the heart and soul of Hong Kong’s business community,” said George Leung, CEO of the HKGCC. “It's deeply concerning that so many of our smaller businesses are in distress, and vital that both the public and private sector come together to ensure that they come through this crisis.”
HKGCC members ranked the Employment Subsidy Scheme (ESS) as being the most useful relief measure, followed by the $10,000 cash handout and subsidies to specific sectors. On their aspirations for the chief executive’s upcoming policy address, respondents were unanimous that the government should focus on continuing to fight the coronavirus and improving the healthcare system.
This was followed by “providing financial support to relaunch the economy” and “improving governance of the administration and maintaining a safe business environment” being ranked as the third most important priority.