Hong Kong Unemployment Hits Record 8.3 Percent
Hong Kong's economic slide was accelerated by the SARS
crisis, hitting a record high of 8.3 percent, according
to figures announced by the Hong Kong government.
Fearing that the situation will get worse before it gets
better, economists said that it is very possible that
recent school and university graduates will force the
unemployment figures into double digits in the summer
before they improve.
According to the government, the number of unemployed
rose by 13,000 to 287,000 in the March to May period.
Catering, retailing, hotel and transport were particularly
hard hit by the SARS crisis. The underemployment rate,
used to define workers who work less than 35 hours per
week, rose to 3.8 percent from 3.2 percent.
The Hong Kong government plans to pump HK$1 billion into
the economy to create temporary jobs. Lately, the Hong
Kong government has publicized the Closer Economic Partnership
Agreement with China. The agreement is a free trade agreement
between China and Hong Kong. For the Chinese government,
this is the first step in negotiating a free trade agreement
with the nations of South-East Asia, which is modeled
on NAFTA (North America Free Trade Agreement).
Hong Kong has a standard of living and costs which are
on a par with North America, Europe and Japan. Since it
has reverted to China, more companies have chosen to relocate
their headquarters to Shanghai, where an office worker
is approximately one-eighth the cost of a Hong Kong worker.
Even though there is a such a wide cost disparity, the
skills are approximately the same. More importantly, Shanghai
is much more appealing as a marketing and sales base than
Hong Kong, because Shanghai staff generally speak the
same languages and dialects as the rest of China, while
Hong Kong workers only speak Cantonese, which is only
spoken in the extreme south of China. In addition, China's
domestic transport infrastructure has largely caught up
with Hong Kong's.
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