Hong Kong Perspectives Recovery will Come, but only Slowly Byron S.J. Weng Hong Kong's sliding economy seems to have stabilized. As of mid-December, the Hang Seng Index was hovering around 10,000, a substantial improvement from the low of 7,880 registered on August 28. The sluggish real estate market, down about 40 percent from its peak, has begun to stir again. Hotel occupancy rates are now a respectable 74 percent. But the picture is not yet of an upswing.
Retail sales remain slow and credit is tight, thanks to the massive withdrawal of Japanese funds.
More companies may still run into difficulty. The rate of unemployment, now up to 5.5 percent, may rise further. It is expected that a wave of layoffs or salary cuts will come in January or soon after. The civil service is already on notice that its employees' pay might be frozen next year. Recovery, the government says, will require another six months or more.