The deprecation of RMB will be detrimental to the shop industry

The year’s end is coming, and the next year is full of uncertainties, particularly since the newly elected US President Donald Trump, who has not yet officially taken office, has announced that he will impose a 10% tariff on all goods importing from China. Since then, the exchange rate of the Renminbi (RMB) against the US dollar has been declining. The market anticipates that the exchange rate of RMB against Hong Kong dollar will fall to 1 to 1 before the middle of next year.

According to Trump's style, there is a good chance that the tariffs on China imported products will be increased by another 10% before the middle of next year. In order to cope with the increasing tariffs, China's only option is to devalue the RMB further and further.

Due to the increasing price disparity between China and Hong Kong, more Hong Kongers will eventually go to northern Shenzhen to enjoy products and services with lower prices, which will have a negative impact to Hong Kong's catering and retail industries. Indeed, the consistent depreciation of RMB will finally drive the troubled shops market into the circle of life and death.

In fact, the property market is full of challenges in 2025. The rental and transaction prices of shops are lower and lower. The poor market condition of shops is reflected in the current deep adjustment of the retail industry. Under these circumstances, the unemployment rate is inevitably rising.

The poor market conditions of shops will spill over into the residential property market. Currently, the number of transactions in the top ten housing estates has decreased to single digits every week, and the declining prices range has increased to 40% of the property price. Some sellers are afraid after Trump takes office, more unfavorable policies will be released one after another, so they are willing to reduce the prices further. In this condition, new transactions with ultra-low prices will be quite common.