The current economic landscape in Hong Kong is fraught with challenges, including high interest rates, geopolitical risks, volatility in foreign currencies, and uncertainties, which create a challenging environment for many industries. Notably, the strong Hong Kong dollar and the increasing volume of cross-border consumption are impacting the retail and hospitality sectors and related investments, posing further challenges for small businesses in Hong Kong.
In its recommendations for Chief Executive John Lee’s Policy Address 2024, the Chamber has called on the Government to persist in improving the business environment, reigniting local consumption and especially extending support to small businesses navigating this complex terrain. While acknowledging the Government’s fiscal constraints, it is crucial to provide reasonable assistance to the real estate sector to mitigate potential damage from significant downward adjustments. Above all, assisting citizens and businesses in rebuilding momentum and confidence and outlining a consistent path towards a brighter future is paramount.
Small and Medium Enterprises
SMEs are the lifeblood and pulse of Hong Kong, accounting for 98% of the total number of enterprises and 44% of total non-civil-servant employment. Recognizing the pivotal role of SMEs in generating jobs and creating value, we strongly believe in the necessity of supporting them in this demanding and complex business environment. We suggest that consideration be given to the following policy measure:
• Improve Access to Finance for SMEs
Human Capital
Hong Kong has witnessed a significant exodus during the pandemic, leading to a decline in its population of young professionals and others. While we applaud the Government’s efforts to attract and retain talent through various talent admission schemes, the ageing population also poses long-term challenges to the labour supply. To this end, continued upskilling and reskilling of the workforce are crucial for staying competitive in this rapidly changing world. We suggest preparing for the future of work through the following strategies:
• Assess the Effectiveness and Enhance Existing Talent Attraction Policies
• Tap into the Latent Labour Pool
• Upskill the Workforce to Meet Future Needs
• Enhance Retirement Benefits to Attract and Retain Talent
• Revisit Policies on Permanent Residence
Tourism
The tourism industry in Hong Kong plays a crucial role in fostering economic growth and creating employment opportunities. However, the sector is encountering significant challenges because of the post-pandemic shifts in travel habits. Although visitor arrivals have shown signs of recovery, the spending per capita still lags behind pre-pandemic levels. While we appreciate the Government’s commitment to developing the mega events economy, we believe there is a need to further enhance Hong Kong’s diverse tourism appeals through the following approaches:
• Showcase the Diverse Facets of Hong Kong
• Enhance Tourism Experiences
• Attract High Value-Added Visitors
Financial Services
We firmly believe in Hong Kong’s irreplaceable position as the region’s financial centre, attributed to the breadth and depth of its financial market. To spearhead the future of finance, we urge the Government to continue taking proactive steps. By capitalizing on the growing wealth management market, tapping into the rising demand for green and sustainable finance, and investing in cutting-edge financial technology, Hong Kong can further solidify its leading role in the global financial landscape:
• Deepen the Family Office System
• Prepare Businesses for Nature-Related Disclosures
• Capitalize on the Growing Carbon Markets
• Prioritize Cultivating and Attracting ESG Talent
• Accelerate the Adoption of Digital Currency
• Establish Comprehensive Cybersecurity Frameworks to Safeguard Financial Data and Systems Against Cyber Threats
Trade, Logistics and Transport
The increasing emphasis on supply chain resilience is pushing companies to diversify their sourcing and manufacturing to mitigate risks. Despite this trend, with its established trade networks and commitment to free trade, Hong Kong remains a vital player in the global value chain. As the geopolitical landscape evolves, competition in the region has intensified. We advocate for reinforcing Hong Kong’s position as an international trade hub, with a specific focus on enhancing the maritime and port industry:
• Strengthen Hong Kong’s Role as an International Trade Centre
• Collaborate for Greater Development of the Entire GBA Port Cluster
• Expedite Smart Port Development
• Optimise Port Operations
• Promote Green Fuel Bunkering
• Decarbonise Commercial Vehicles
• Increase Adoption of Sustainable Aviation Fuel
Innovation and Technology (I&T)
Hong Kong aims to evolve into an international I&T hub. To accelerate the digital economy, it is crucial to further boost the data centre capacity, advance information and communications technology (ICT) development, and prepare for the future of artificial intelligence (AI). These steps are essential for Hong Kong to capitalize on the opportunities presented by the emergence of the low-altitude economy, autonomous driving, and other innovative technologies. We suggest that consideration be given to the following strategic initiatives:
• Expand Data Centre Capacity
• Facilitate Data Flow and Safeguard Data Security
• Leap Forward in ICT Development
• Improve Positioning Infrastructure
• Prepare for the Future of AI
Greater Bay Area (GBA)
This year marks the 5th anniversary of the GBA, a region rapidly becoming a global economic powerhouse. Given the vast and growing market, the GBA provides new impetus for Hong Kong’s economic development. We urge the Government to continue engaging with Mainland authorities to implement innovative policies that enhance connectivity between Hong Kong and other GBA cities:
• Facilitate the Seamless Flow of Resources
• Promote the Use of e-CNY in Cross-Boundary Payments
• Develop a Robust Application Programming Interface Framework
Land and Housing
We appreciate the Government’s acceptance of our proposals to eliminate all property cooling measures earlier this year, providing timely support to the housing sector. Additional endeavours are necessary to sustain a healthy property market and ensure an adequate land and housing supply. We urge the Government to proactively plan for the new development areas (NDAs) and embrace green building practices, which are essential for sustainability efforts:
• Accelerate Infrastructure Development to Facilitate the Construction of NDAs
• Enhance Energy Efficiency in Buildings
• Promote Green Building Standards
Healthcare
The Covid-19 pandemic has unveiled weaknesses and opportunities in Hong Kong’s healthcare system. Moreover, the rapidly ageing population is outpacing society’s capacity to address the healthcare needs of its elderly citizens. To build a robust healthcare system, we suggest consideration be given to the following policy measures:
• Invest in Innovative Health Technology
• Attract, Facilitate and Support Private Investments in Healthcare Services
• Develop the Traditional Chinese Medicine Industry
Liveable City
Hong Kong is striving to achieve carbon neutrality by 2050. The city must implement a concrete plan to transition into a net-zero emissions economy and society. This entails promoting green transport and establishing a comprehensive waste management strategy. Additionally, the social pillar of ESG is crucial for fostering a liveable environment that can attract and retain talent. We suggest consideration be given to the following policy measures:
• Adopt Nature-Based Solutions for Enhancing Climate Resilience
• Optimize the Overall Waste Management Landscape
• Enhance the Producer Responsibility Scheme on Plastic Beverage Containers and Beverage Cartons
• Promote Sustainable Lifestyles