SEVERAL FACTORS HAVE harmed Hong Kong’s economy recently. There was the social turmoil in 2019, the COVID-19 epidemic raging around the world in 2020, and the political suppression of Hong Kong by Western countries led by the United States.
This downturn started with the large-scale violent destruction caused by the revision of the Fugitive Offenders Ordinance. The violence led Hong Kong’s economy to fall into a severe recession before the outbreak of COVID-19.
After the implementation of the Hong Kong National Security Law and the change in Hong Kong’s electoral system, society has moved from chaos to order, the economy has gradually recovered, confidence has gradually increased, and the business environment has gradually stabilized. We have entered a new era of good governance.
WORLD CLASS EFFICIENCY
According to the “World Competitiveness Annual Report 2022” released by the Lausanne Institute of Management, Hong Kong’s ranking rose from seventh last year to fifth globally last year. Among the four competitiveness factors in the annual report, Hong Kong ranks the best in “Government Efficiency” and ranks second in the world, but it has dropped one level from last year and was overtaken by Switzerland. According to the survey of 63 economies around the world, the “World Competitiveness Annual Report” analyzes the four major indicators of “economic performance”, “government efficiency”, “business efficiency” and “infrastructure” to determine the ranking.
Among the four competitiveness factors in the report, Hong Kong’s rankings in “Government Efficiency” and “Business Efficiency” were slightly lower than those in the previous report, among which “Government Efficiency” lost its top position and dropped slightly to second place. “Business Efficiency” dropped from third to seventh in the previous year. Among the four factors, “economic performance” ranks the worst, but its ranking has risen significantly from 30th in 2019 to 15th. As for the ranking of “infrastructure”, it rose from 16th last year to 14th. In terms of sub-factors, Hong Kong continues to rank first in the world in “Business Regulations”, and remains in the top three in the world in “International Investment”, “Public Finance” and “Tax Policy”.
LOCATION ADVANTAGE
The ranking affirms that Hong Kong is one of the most competitive economies in the world. Hong Kong’s competitiveness depends on the institutional advantages of “one country, two systems”, including the rule of law and judicial independence, free capital in and out, free trade and investment systems, simple and low tax system, good business environment and efficient government. It reflects Hong Kong’s location advantage of being supported by China, facing the world and the superiority of “one country, two systems”.
Hong Kong has developed into an international financial, commercial and headquarters center, as well as a major investment, transportation and logistics hub, based on its positioning of “relying on the motherland and facing the world”. Under “One Country, Two Systems”, Hong Kong has established an economic system that is different from other cities in the country. At the same time, it has world-class infrastructure, which facilitates the flow of people, goods and information between Hong Kong and the rest of the world. For foreign companies and talents, Hong Kong’s geographical location is superior, providing them with a direct entry point into the huge mainland market, and it is also the gateway to the Greater Bay Area with a population of 86 million and an economic aggregate comparable to the ninth largest economy in the world international gateway. In addition, Hong Kong has a blend of Chinese and Western cultures, and the fusion of metropolitan culture and rural environment is undoubtedly very attractive to overseas talents. These advantages and characteristics allow Hong Kong to play an irreplaceable role as a gateway connecting the country and the rest of the world.
SO MANY ADVANTAGES
In addition to the above-mentioned advantages, the “14th Five-Year Plan” has positioned Hong Kong as an international financial, shipping, trade center and international aviation hub, a global offshore RMB business hub, an international asset management center and a risk management center; an international innovation and technology center, The Asia-Pacific International Legal and Dispute Resolution Service Center, the Regional Intellectual Property Trade Center, and the Sino-foreign Cultural and Art Exchange Center have brought huge business opportunities to Hong Kong.
In addition to continuing to function as an important node in the country’s international cycle, Hong Kong will work closely with other cities in the Greater Bay Area to tap into the internal cycle of the national economy through the Greater Bay Area and open up more room for development. Looking forward to the future, as the national economy continues to develop rapidly, the general trend of the global economic center of gravity moving from west to east will continue. Hong Kong will be full of opportunities, and international investors will also obtain more abundant and diversified development space in Hong Kong. The central government has further adjusted Hong Kong’s electoral system in order to implement “patriots governing Hong Kong” so that “one country, two systems” can be implemented steadily and in the long run, laying a solid foundation for Hong Kong’s long-term stability and stable development in the future. These changes have enabled Hong Kong to maintain a safe and vibrant business environment in the long run, continue to leverage various competitive advantages, and promote long-term and stable economic development.
Image at the top by Bowen Chin on Unsplash