Hong Kong bankruptcies on the rise

Businesses are taking a beating amid the worsening economic crisis with bankruptcy petitions rising 12.3% in August compared to July.

The government reported 785 bankruptcy petitions in August. The total was also 0.8% more than the August 2011 figure. There were 5,758 bankruptcy petitions from January to August this year, a 4.5% increase year-on-year.

In August, the government reduced its 2012 full-year GDP growth forecast to 1% to 2% from 1% to 3% as the Eurozone crisis and sluggish global growth slash demand for exports.

Financial Secretary John Tsang last week, however, warned that the massive stimulus unleashed by the U.S. government the week before carried the potential to plunge Hong Kong into recession in 2013.