Mainland enterprises in the SAR vow not to sack staff

More than 4,000 Chinese mainland-funded enterprises in Hong Kong, including China Resources (Holdings) and Bank of China (Hong Kong), have promised to avoid layoffs amid the coronavirus pandemic.

The move by the companies, which employ thousands of people in the SAR, is in response to a call by the recently formed Hong Kong Coalition co-convened by former Hong Kong chief executives Tung Chee-hwa and Leung Chun-ying.

The 1,500-member coalition, which includes some of Hong Kong's most prominent political and business figures, has vowed to revive the city's battered economy and help new graduates find employment.

A wide range of local businesses have been hard hit by months of violent social unrest that erupted in June, as well as the COVID-19 pandemic, forcing hundreds to shut down, lay off staff or cut wages.

"As a mainland-funded enterprise that has been operating in Hong Kong for more than 80 years, we believe we have to stay united so that we can see the light at the end of the tunnel. We guarantee we'll not cut jobs in these difficult times," China Resources Group Chairman Fu Yuning said on Tuesday.

Hong Kong Chief Executive Carrie Lam Cheng Yuet-ngor said on Tuesday the SAR government will accept applications from companies for wage subsidies to the tune of HK$81 billion ($10.5 billion) from May 25, with the relief program now being expanded to cover an additional 290,000 employees, including those aged 65 or above and the self-employed.

The plan is designed to help local companies avoid layoffs. It is believed that many large-scale mainland-funded enterprises in Hong Kong will not apply for the subsidies to avoid putting an extra burden on the SAR government and taxpayers of Hong Kong.

As of the end of 2017, there were some 4,200 mainland-funded enterprises in the SAR with total assets exceeding HK$2 trillion. Among them, 42 had HK$100 billion in assets.

Besides China Resources Group, other mainland enterprises, including China Merchants Group, China Tourism Group, China Pacific Insurance Group and Sino Biopharmaceutical, have pledged to retain staff as well.

In addition, nearly 200 Hong Kong companies said they'll support the Hong Kong Coalition's initiative, including Sun Wah Group and Polaris Arts & Jewelry.

"That's (over 4,200) quite an amazing number," said Irons Sze Wing-wai, deputy secretary-general of the coalition, adding he's happy to see the response in just one week. Sze is also permanent honorary president of the Chinese Manufacturers' Association.

He said the local companies are willing to shoulder their responsibilities in the face of a bleak employment market, calling it a "quite admirable" response.

Sze didn't say whether these companies will cut staff salaries or ask employees to take unpaid leave. He said every company has its own arrangements to ride out the crisis and workers would be lucky if they were to retain their jobs.

Hong Kong's unemployment rate has soared to a nine-year high as the local retail and catering sectors took the brunt of the pandemic on the back of months of social unrest.

The number of people out of a job from January to March this year surged to 4.2 percent — up from 3.7 percent for the three months up to February — while the underemployment rate for the same period climbed from 1.5 percent to 2.1 percent, according to Census and Statistics Department data released on April 20.