Hong Kong social enterprises on the brink after protests, Covid-19

Many of the city's social enterprises, which help homeless and other vulnerable people, are struggling to stay afloat.

Hong Kong demonstrations
Riot police stand guard to prevent people from gathering during a demonstration opposing postponed elections, in Hong Kong, China September 6, 2020. Image: Reuters/Tyrone Siu

A quarter of Hong Kong’s social enterprises could go out of business by the end of the year, according to a new poll, threatening the jobs of hundreds of employees as the coronavirus pandemic takes a heavy toll on the city’s economy.

Covid-19 has exacerbated the woes of the roughly 600 social enterprises that operate in Hong Kong, which have been suffering a sharp slump in business and consumer sentiment since last year due to massive anti-government street protests.

A survey of 128 social enterprises - businesses that aim to do good while turning a profit - found one in four expect to run out of cash flow within three months if the pandemic continues to affect their revenue.

“It’s a very challenging outlook,” said Chung Wai-shing, vice-chairman of the 76-member Hong Kong General Chamber of Social Enterprises, which released the poll this month.

“We didn’t expect such a situation to drag on for so long and, as social enterprises, we are hit just as hard as other businesses since we don’t rely on donations or funding,” he told the Thomson Reuters Foundation by phone.

About a third of the poll’s respondents said their earnings had fallen more than half in the last six months, while one in 10 said they had no income at all.

Hong Kong’s government has handed out subsidies to help businesses cushion the pandemic impact since early this year, but Chung called for more financial assistance.

We didn’t expect such a situation to drag on for so long and, as social enterprises, we are hit just as hard as other businesses since we don’t rely on donations or funding.

Chung Wai-shing, vice-chairman, Hong Kong General Chamber of Social Enterprises

Chung, who runs a social business that hires people with disability in convenience stores, said the sector often works with vulnerable groups, such as the long-term unemployed or disabled people.

“They are even more vulnerable now and the role of social enterprise has never been greater to help these marginalised people recover from the fallout of the pandemic,” he said.

Delicious Express, a Hong Kong social enterprise selling food that hires impoverished women and disabled people, has had to shut one store, lay off several employees and cut working hours to survive.

“We hope these measures mean we can stay afloat for a longer term,” said company founder Eva Mak, who has 13 staff.

“The job doesn’t only give them an income, most importantly it helps them to rebuild confidence as many of them were unemployed for a long time,” she said on Tuesday.

The Asian financial hub has detected 4,976 cases of the virus that emerged in central China late last year with 101 deaths.

This story was published with permission from Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, climate change, resilience, women’s rights, trafficking and property rights. Visit http://news.trust.org/climate.

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