Facing a fiscal deficit of HK$87.2 billion, the Government has introduced various measures to cut expenses in the latest Budget announced last month. However, to effectively eliminate the deficit, increasing revenue is more proactive and essential than merely reducing expenditure.

According to Financial Secretary Paul Chan, the Budget serves as a “reinforced version” of the fiscal consolidation programme, aiming for a cumulative reduction of Government recurrent expenditure by 7% through 2027/28. Consequently, the operating account is projected to return to a surplus by 2028/29.

While the Government’s multi-faceted approach to cutting expenses is evident, both increasing revenue and reducing costs are critical to restoring fiscal balance. In my view, exploring new income sources is more innovative and beneficial for long-term economic and industrial development.

Attracting investment and talent, as well as exploring emerging markets, are vital for Hong Kong’s economic growth. The Government has been actively engaging with foreign nations and regions to strengthen ties with the Hong Kong business community, and implementing various strategies to attract enterprises and investments.

Last year, Invest Hong Kong successfully brought in over 500 Mainland and overseas companies to establish or expand their operations in the city, which is expected to generate more than HK$67.7 billion in direct investment.

Additionally, under the coordination of Invest Hong Kong, the Airport Authority signed a memorandum of understanding with a leading overseas aeronautic services company to explore professional services such as aircraft dismantling, parts recycling, and related training in Hong Kong. 

This initiative aims to develop Hong Kong into Asia’s premier aircraft parts processing and trading centre, potentially attracting over HK$10 billion in investment. This development will benefit not only Hong Kong’s aviation industry but also reinforce the city’s status as an international aviation hub.

The Budget also introduced a new list from the Office for Attracting Strategic Enterprises (OASES), featuring over 10 strategic enterprises. Together with previously identified companies, this is expected to bring nearly HK$50 billion in investment over the next few years, creating 20,000 jobs.

As a crucial bridge between the Mainland and the global market, Hong Kong continues to attract interest from investors in Europe, the Middle East and ASEAN countries. Hong Kong’s various sectors and industries must strive to attract investment projects to create win-win opportunities.

Jeffrey Lam
jeffrey@jeffreylam.hk