Hong Kong is struggling to recover since the COVID pandemic, which saw many expatiates leave after a three year shutdown, and tourist numbers dwindle to a fraction of pre-pandemic levels. High rents and a labour shortage are now adding to the pain.

When Jacky Yu, 48, opened his Japanese gift shop in Hong Kong more than a decade ago, the tourist and shopping district of Mong Kok was a bustling hub packed with stalls, street food and tourists.

Fast-forward 12 years and parts of the area are struggling to stay afloat, a combination of customers emigrating, locals heading across the border to shop in China or travelling to Japan to benefit from a weak yen - and a dearth of tourists.

Yu says he's had to make the "heartbreaking" decision to close his store and move it online.

"I almost want to cry when I talk about it," said Yu, packing his unsold stationery and toys into storage boxes.

"There are very few tourists on the streets, even the mainland Chinese are very few."

Hong Kong is struggling to recover since the COVID pandemic, which saw many expatiates leave after a three year shutdown, and tourist numbers dwindle to a fraction of pre-pandemic levels. High rents and a labour shortage are now adding to the pain.

Businesses describe shopping malls as "dead", with low foot traffic and shops covered with "for lease" or "coming up soon" signs.

Edmund Wong, an accountancy sector lawmaker, told the city's legislature last Friday that more than 20,000 companies had deregistered in the first quarter of 2024, up more than 70% from the same period last year.

Simon Wong, president of the Hong Kong Federation of Restaurants and Related Trades, told public broadcaster RTHK that he estimated around 200-300 restaurants had closed over the past month, a trend he expects to continue.

On Tuesday, Hong Kong leader John Lee played down concerns about businesses closing.

"The world is always changing, and different industries will need to adapt, so there will be operators who are not so successful but new-comers are getting into the market."

Even with the Golden Week holiday starting on Wednesday, a traditionally busy time for shopping and entertainment, many businesses are not optimistic.