Hong Kong's leader today announced a cut in alcohol tax as the Asian financial hub hopes to revive its reputation as a tourist destination with vibrant nightlife and cuisine.
After enacting a national security law as defined by Beijing, Chief Executive John Lee now faces economic challenges and regional rivals such as Singapore, Japan and even cities in mainland China.
Changing lifestyles of Hong Kong residents and a wave of middle-class emigration during the Covid-19 pandemic have reduced local demand.
Many residents now prefer to spend weekends in China, attracted by the lower prices and greater variety of entertainment options. Mainland visitors are also spending less in the city than before.
It is common to see empty stores in the city's most popular commercial areas and revenues in the city's bars decreased by around 28% in the first half of this year compared to the same period in 2019, preliminary official data indicates.
In the annual policy speech, Lee said the tax rate for alcoholic beverages with an import price of more than 200 Hong Kong dollars (about 24 euros) will now be reduced from 100% to 10% above that price.
The official said he hopes this policy will promote the logistics, warehousing, tourism and luxury restaurant sectors.
In 2008, when Hong Kong abolished wine taxes, imports increased by 80% in one year and the city welcomed hundreds of new wine-related businesses.
Lee, a former security secretary chosen by Beijing to lead China's special administrative region, approved the new security law in March. Critics said they feared the law would curtail civil liberties promised to the former British colony when it returned to Chinese rule in 1997.
This law followed a similar law imposed on Hong Kong by Beijing in 2020 in the wake of anti-government protests that rocked the city in 2019. Since it came into effect, many leading local activists have been prosecuted and others have been exiled. For the regional government, security laws are necessary for the stability of the territory.
These dramatic political changes have also led many middle-class families and young professionals to emigrate to the United Kingdom, Canada, Taiwan, and the United States.
To attract more wealthy emigrants, Lee also revised a scheme that grants residency to applicants who invest a minimum of 30 million Hong Kong dollars (about 3.6 million euros) in certain types of assets. From today, purchases of homes valued at 50 million Hong Kong dollars (about 5.9 million euros) or more can count toward up to a third of the requirement, he said.
Hours before Lee's speech, a small group of activists from the League of Social Democrats, one of the few pro-democracy parties left in the city, organized a small demonstration outside the government headquarters.
They demanded universal suffrage for elections to the executive and a retirement regime: "return to democracy, improvement of people's living conditions", they shouted.
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