Finance chief upbeat on Hong Kong prospects despite weak economy
Hong Kong’s finance chief has voiced optimism over the city’s medium to long-term prospects despite the weak global and domestic economies, citing “lots of inquiries” received on a new talent scheme.
The remark came with a warning from the city’s leader John Lee Ka-chiu, who said social stability was needed for the economy to develop.
Financial Secretary Paul Chan Mo-po yesterday told a forum he had confidence in the city’s future as the administration had been approached by parties interested in talent proposals laid out by Lee in his maiden policy address.
“The policy address has put forward some aggressive and bold measures to attract enterprises and talent,” Chan said in his speech at the Hong Kong Economic Summit 2023.
“It can be expected that in 2023 and the coming few years, Hong Kong’s popularity and wealth will flourish,” he added.
The new administration in October rolled out a slew of measures to woo global talent, including offering a two-year visa to individuals earning no less than HK$2.5 million annually, and to graduates of the world’s top 100 universities with at least three years’ working experience over the past five years.
Non-local, first-time homebuyers would get a refund of the extra 30 per cent stamp duty paid if they remained in Hong Kong for more than seven years and obtained permanent residency. Skilled immigrants who came to the city would also be allowed to stay for two to three years at a time, instead of only one or two years.
Chan said Hong Kong’s development in innovation and technology could boost its competitiveness, while the city had the backing of mainland China and institutional advantages under the “one country, two systems” governing principle.
Lee, on the same occasion, emphasised that economic development could only be achieved with social stability because endless attrition and dispute would lead to all good intentions and measures being ineffective. “To stabilise Hong Kong’s economy amid the gloomy environment, the prerequisite is to maintain stability in the social environment,” Lee said in his speech.
Despite his upbeat stance on the city’s future economy, Chan said global economic growth had been “quite weak” as geopolitical tensions had disrupted supply chains and roiled financial markets, triggering inflation and rate increases, as well as weakening investment.
He noted the city’s economy was also weak, even though Hong Kong was in a “less difficult” situation with a moderate inflation rate of 1.7 per cent compared with that of Singapore, Europe and the United States, which ranged between 6 and 13 per cent. He also pointed to the city’s unemployment rate dropping to a relatively low level of 3.8 per cent. “Although the unemployment rate isn’t very high, workers and grass-roots income are limited, and residents still face real pressures in life,” Chan said.
He acknowledged the city had been experiencing a contracting economy, with the government downgrading its full-year forecast to a drop of 3.2 per cent. Yet, Chan argued recent largescale events, including a high-level financial summit and the Hong Kong Rugby Sevens last month, had lit up the market. He expressed hope that future events would further stimulate consumption.
The eased Covid-19 socialdistancing curbs and consumption vouchers distributed in October and for the coming Christmas and New Year holidays would also support the market to a certain extent, he added.
Hong Kong has relaxed stringent pandemic measures by lifting restrictions on restaurants’ opening hours and seating capacity, while arrivals no longer have to serve hotel quarantine under a “0+3” model requiring only three days of medical surveillance with limited citywide movement.
Despite the easing, George Leung Siu-kay, chief executive of the Hong Kong General Chamber of Commerce, urged authorities to reopen the border between Hong Kong and mainland China as soon as possible.
“Even if the mainland reopens its border with some restrictions, I believe it will have immediate results for the city’s economic recovery … No matter if the border is reopened with the mainland or overseas, I believe Hong Kong stands a higher chance of positive [economic] growth next year,” Leung said.
The mainland earlier relaxed quarantine measures from seven days in a hotel to five followed by three in home isolation according to a “5+3” model, also applicable to those from Hong Kong. Businesspeople and sports groups regarded as “important” by authorities will be allowed to conduct their activities in a quarantine-free “management zone”.
It can be expected that in 2023 and the coming few years, Hong Kong’s popularity and wealth will flourish
FINANCIAL SECRETARY PAUL CHAN