Jeffrey Lam is the Chamber's Legco Representative
Send your view to jeffrey@jeffreylam.hk
Dynamic strategies and visionary insights are essential when navigating challenges. With the current fiscal deficit, there is a pressing need for the Government to stimulate economic development by fostering new growth drivers and attracting foreign businesses and investments in a flexible way that responds to market needs.
With the new U.S. administration taking office, geopolitical uncertainties are expected to continue. The relationship between China and the U.S. and Hong Kong’s trade dynamics are closely linked. Between 2018 and 2023, Hong Kong’s total exports to the U.S. fell from HK$357 billion to HK$272 billion; during the same period, the share of Hong Kong products in U.S. imports halved. As a result, Hong Kong needs to develop new markets. Given the ongoing structural economic transformation in the city, injecting new impetus into the economy is vital.
The Government has made significant efforts to attract businesses and talent to drive economic growth. This includes active outreach campaigns promoting Hong Kong and fostering exchanges and cooperation with emerging markets, such as the Middle East and ASEAN countries.
With neighbouring regions also endeavouring to entice businesses and talent, we cannot just follow suit. Instead, we must tailor our strategies to the local market conditions with a clear objective and direction. By doing so, we can prevent adaptability issues that enterprises and talent may encounter upon arrival while also addressing the needs of the local business environment. This, in turn, will ultimately benefit economic development.
The development of the economy and the improvement of people’s livelihoods require the collective effort of the entire government team. To effectively provide one-stop services for foreign enterprises and talent interested in coming to Hong Kong, substantial manpower is essential. However, there have recently been calls to reduce government expenditure by cutting civil servants’ salaries.
Currently, there are approximately 20,000 vacancies in the civil service. Of the roughly 9,300 civil servants who left in 2023-24, about 30% resigned. Given natural wastage and the competitive salaries offered by statutory bodies and the private sector, any reduction in pay could negatively affect the morale of civil servants and create a ripple effect. In contrast, Singapore pegs the salaries of public servants to the salary levels of top private-sector earners. Additionally, civil servants receive performance bonuses, fostering a motivating environment.
Reducing civil service pay is not a complete solution. While the fiscal deficit cannot be solved by cutting expenditures alone, the Government should heed business opinions and take decisive actions to boost the economy.
Jeffrey Lam
jeffrey@jeffreylam.hk