George Leung, CEO of HKGCC
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We ended 2022 on an optimistic note, and for 2023, businesses in Hong Kong are cautiously optimistic that the worst may be behind them. A total of 40% of respondents to the Chamber's Business Prospects Survey indicated that they expected turnover to increase in 2023. However, 40% also anticipate business turnover to still be lower than pre-pandemic levels. So it appears there is still a long way to go be fore Hong Kong can regain a solid footing on the road to recovery.
At the time of writing, there were signs that travel to and from the Mainland could improve soon, which was the biggest concern among all businesses, regardless of size. The axing of the amber code for visitor arrivals to Hong Kong in December makes it less complicated for business travellers and tourists to come to Hong Kong. But the need to conduct two PCR and daily RAT tests for arrivals for five days is still a significant deterrent, especially when people can go just about everywhere else in the world freely.
We have been in constant dialogue with the Government to explain that as the rest of world has reopened, it is increas ingly pressing for Hong Kong, as an international city and premier business centre, to not fall further behind. This sentiment is shared by an overwhelming majority of respondents (94%) who either agree (75%) or somewhat agree (19%) that normalizing crossborder travel with the Mainland and rest of the world should be the top priority for the SAR Government.
The lack of a free flow of people is also exacerba ting Hong Kong's talent shortages and pushing up wages. This is reflected in the hiring intentions of companies, with 34% of respondents saying they hope to hire more staff. Unless the sldlls short age issue is addressed quickly and effectively, it would be very difficult to maintain our global competitiveness.
We are fortunate to be a part of the Greater Bay Area. For respondents that already operate in the region, 34% said they would increase capital investment over the next 12 months. This compares to 26% planning to expand their presence in the rest of the Mainland. However, we cannot afford to put all of our eggs in the GBA basket to drive our growth.
Hong Kong is on the cusp of shedd ing the shackles of Covid-19 restrictions to allow it to retake its position as Asia's leading business and financial hub. And the sooner we can achieve this the better, because Hong Kong still has other headwinds to battle, including rising interest rates and weakening global demand as households tighten their belts due to soaring inflation.
As we approach the Year of the Rabbit, Hong Kong has to avoid being timid in its easing of Covid-19 regulations and recovery strategy. With so much pent-up desire to get back to business, Hong Kong needs to come out roar ing like the dragon that the world has admired for so many years.