Opinion: At an economic crossroads, Hong Kong needs a proactive strategy
[ad_1]
In his budget, Chan forecast the economy to grow between 3.5 and 5.5 per cent this year, riding on expectations of post-Covid “revenge” consumption and inbound tourism, while assuming a strong rebound on the mainland.
Between 2018 and this year, the global gross domestic product grew by 13 per cent in real terms. Mainland China grew by 27 per cent and Singapore by 11 per cent, but Hong Kong’s figure is negative 0.9 per cent. Putting aside the pandemic disruptions experienced by all economies, Hong Kong has also suffered immensely from the 2019 unrest and its political aftermath.
Structurally, Hong Kong faces a supply bottleneck in land, labour and capital. While investment from the public sector in machinery, equipment and intellectual property products has doubled over the past decade, that of the private sector has been on steady decline especially since 2019, with the 2022 level at only 40 per cent of 2012.
At this critical juncture, opportunities and challenges are two sides of the same coin.
Hong Kong’s future lies in a rising China and a rising Asia. The mainland is now the main supplier of capital and talent. As the city’s finance becomes dependent on mainland corporations and their performance, it is increasingly exposed to risks and twists and turns in the mainland economy.
Such dependence might also mean less effort made to attract international capital and a further distancing from Western economies, with which Hong Kong used to enjoy strong connections.
After Hong Kong’s expat exodus, talent search drives mainland Chinese influx
After Hong Kong’s expat exodus, talent search drives mainland Chinese influx
While the Greater Bay Area, and Asia on a larger scale, will provide a relaunch pad for the local economy, regional competition has become fiercer. The city cannot afford to be just a passive player adapting to paths defined by others. A proactive regional strategy is necessary.
In fostering an innovation and tech hub, Hong Kong must partner with other cities in the Greater Bay Area and learn to better leverage its existing strengths in finance and professional expertise, as well as its hub status and global connectivity.
Its world-class universities are not short of top-notch researchers in science and technology. Yet local firms have long thrived in trade, real estate and finance instead.
Re-industrialisation requires a paradigm shift and transformative reskilling on the part of both enterprises and government agencies. Innovation should be a potent force of change in all parts of society, including industries, public services and social innovation.
Opening multiple routes for talent from around the world is indeed essential. Bill Gates once said that cutting-edge companies base their location decisions on the availability of talent and a culture for innovation, rather than tax policy. Hence retaining talent is as crucial as recruiting new talent.
Does Hong Kong need expats back? Absolutely – our city is better for it
Does Hong Kong need expats back? Absolutely – our city is better for it
Hong Kong’s immediate challenge is economic, which also affects the city’s public finances and ability to invest in infrastructure and human capital. The response strategy cannot lose sight of politics.
As conspiracy theories abound, mainly about the national security law and patriots-only administration, local anxieties about the future and international doubts breed uncertainty over the economy.
Intense US-China rivalry defines the new normal. Hong Kong needs to map out a workable path and re-conceptualise its intermediary role so that it can still purposefully serve China and the world. The onus is on it to underscore its determination to remain a city of pluralism, possibilities and best practices despite all odds.
Anthony Cheung is a former secretary for transport and housing
[ad_2]
Source link