The Impact of the COVID-19 Pandemic on Hong Kong's Service Sector

Abstract

The COVID-19 pandemic has severely affected the global economy, and Hong Kong, a global economic center, is no exception. In the face of strict border restrictions around the world and the yet unspecified deadline for customs clearance with the Mainland , the service sector, which is an important part of Hong Kong's economic structure, has been hit hard by the pandemic. This paper gives a brief discussion of the impact of the COVID-19 pandemic on Hong Kong's service sector by analyzing its air transport services and insurance services. On the one hand, air transport services have experienced plummeting passenger throughput, but cargo throughput has remained at a certain level. On the other hand, there has been no significant change in premium income and the number of persons engaged in insurance services compared with those before the pandemic. However, this is the result of relying on the income of long-term business, and growth in the amount of new business has been slow. These two aspects reveal that the main impact of the COVID-19 pandemic on Hong Kong's service sector is the reduction in the number of customers, which is undoubtedly a huge shock on the service sector that is highly dependent on offline communication with customers. Although the Government of the Hong Kong Special Administrative Region has taken certain proactive policies, the pandemic has brought severe challenges, and there is an urgent need for the service sector to transform and develop online markets. Understanding the impact of the pandemic on Hong Kong's service sector is more conducive to formulating relevant policies to promote the development of the service sector.