Hong Kong bankruptcies spiral amid recession
A second economic recession in five years, rising unemployment and a general global slowdown have all contributed to a massive rise in bankruptcies in Hong Kong.
The latest figures showed a tripling in numbers over the last five months – there were 8,104 bankruptcies from January to May 2002, compared with just 2,738 during the same period last year. 2001’s total of 9,151 bankruptcies was a record for any year.
Analysts Merrill Lynch predicted gloom for the months ahead, saying the numbers were not expected to come down anytime soon.
A contributing factor to the dramatic increase in bankruptcies is believed to be the decision of the government to reduce the rehabilitation period from eight years to four years.
In addition, the island has struggled to shrug off the collapse in the Asian Tiger economies in 1997 and 1998.