Christopher Tang

Opinion | Despite setbacks, Hong Kong is still the best place to do business

The exit of foreign firms and falling property prices shouldn’t overshadow the city’s resilient growth, access to the rest of China, and support for innovation

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Christopher Tang

Published: 9:30am, 17 Sep 2024

Hong Kong is experiencing both contraction and growth in different sectors. While there is room for cautious optimism about its future, it is crucial for the government to develop a coordinated plan to stimulate the economy by retaining current enterprises and attracting new investments to ensure long-term success.

Two contrasting narratives about Hong Kong may discourage investment. The property market has contracted, with residential prices falling 13.2 per cent year on year in the first quarter of 2024, marking the ninth consecutive quarter of decline. The commercial sector faces high vacancy rates and declining rental values.

Despite this, Hong Kong’s economy has shown resilience, with gross domestic product (GDP) growing 3.2 per cent year on year in 2023 and continuing the positive trend in the first half of 2024.

Census and Statistics Department data shows a net inflow of 51,700 residents between the end of 2022 and 2023, increasing the population by 0.4 per cent, despite significant emigration.

The number of global companies with regional headquarters in Hong Kong decreased by 13.3 per cent between 2019 and 2023, according to Census and Statistics Department data, with firms like FedEx moving to Singapore last year.

The exit of these firms has led to a 32 per cent drop in staff they engaged during this period, but vacancies are being filled by mainland Chinese professionals through Hong Kong’s Top Talent Pass Scheme, launched in December 2022.