AS THE GLOBAL economy navigates the ebbs and flows of mid-2020, Hong Kong is steadfastly maintaining its position as a resilient and adaptive economic powerhouse. Despite doubts about its unique blend of East and West, Hong Kong continues to validate its merits through a robust legal system and sophisticated financial services, making it an indispensable partner for multinational corporations and entrepreneurs alike.
In the past few years, Hong Kong’s economic journey has not been without its challenges. For superficial reasons, the grappling with social unrest, the COVID-19 pandemic, and escalated geopolitical tensions, have certainly taken a toll. Yet, Hong Kong needs to be honest about its internal problems, such as struggling to capture global opportunities to strengthen its strategic reforms and renew its focus on core strengths. A prime example would be the city’s inability to effectively attract and retain tech entrepreneurs and programmers from countries in conflict or with large migrant populations, forgetting that Hong Kong is an international city because of its historical immigration stories.
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Notwithstanding these obstacles, Hong Kong’s key advantage has been its status as a leading global financial center and a hub for international finance, trade, and business. Initiatives such as the development of the Greater Bay Area, which aims to more closely integrate Hong Kong with Mainland China’s Guangdong province, have further bolstered the city’s role as a gateway to the lucrative Chinese market. Even if Hong Kong may lack the traditional industrial productivity of some of its Mainland counterparts, the city has long thrived in the service and consultancy industries, particularly in the finance sector.
This, however, has also led to concerns over short-sightedness and a focus on agents’ wealth accumulation at the expense of professional integrity, putting a wall of doubts between Mainland entrepreneurs and Hong Kong professionals. To maintain its global competitiveness, Hong Kong must continue to uphold the highest standards of ethics and professionalism, ensuring that its financial and consultancy services are profitable and trustworthy for a commitment to sustainable growth and the greater good as well as fostering win-win partnerships with Mainland Chinese businesses.
Secondly, Hong Kong has been working hard to praise itself. To further strengthen Hong Kong’s global competitiveness, it is essential to garner international support and recognition. Relying solely on local endorsement may not be as effective as having praise from global experts, expatriates, and other international stakeholders. By diversifying the voices that champion Hong Kong’s strengths, the city can better showcase its unique position and appeal to a wider global audience. Strategies to encourage global businesses and their professionals to tout Hong Kong as the premier destination for doing business will be crucial.
Hong Kong’s integration into the Greater Bay Area presents both opportunities and challenges. While the region has immense economic potential, communication and collaboration between Hong Kong and its Mainland counterparts can still be siloed at times. Developing more effective communication channels and finding the right balance between socialism and capitalism will be key to harnessing the synergies between Hong Kong’s strengths and the Mainland’s productivity. Positioning the Greater Bay Area as a successful case study for a socialist country leading its capitalist neighbors will be crucial, as we believe in future decades, China will rise as the new leader in the next world changing order.
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One particularly promising area of growth for Hong Kong lies in its potential to serve as a gateway for Mainland Chinese entrepreneurs seeking to expand their businesses globally. As the baby boomer generation in many Western countries begins to reach retirement age, a significant number of small and medium-sized enterprises are expected to change hands in the coming years. This presents a unique opportunity for agile and ambitious Mainland entrepreneurs to acquire these overseas businesses and leverage Hong Kong’s status as an international financial hub. Hong Kong’s well-established legal system, sophisticated financial services, and global connectivity make it an ideal launchpad for Mainland entrepreneurs to purchase and manage overseas companies. By establishing offshore holding companies in Hong Kong, these entrepreneurs can more easily navigate the complexities of cross-border mergers and acquisitions, access global capital markets, and repatriate dividends and profits back to the Mainland.
To fully capitalize on this opportunity, Hong Kong will need to continue refining its professional environment, streamlining administrative processes, and attracting specialized talent in areas such as mergers and acquisitions, international tax planning, and cross-border asset management. By positioning itself as the go-to destination for Mainland entrepreneurs seeking to expand their global footprint, Hong Kong can cement its role as a dynamic and essential component of China’s broader economic strategy.
Overall, education leads to innovation, which enhances our competitiveness, resulting in increasing our economic output. By investing in its servicing industries and leveraging its unique attributes, Hong Kong is poised to reclaim its status as one of the most dynamic economic hubs in the Asia-Pacific region and beyond. As Hong Kong continues to evolve, fostering an environment conducive to creativity, entrepreneurship, and ethical business practices will be essential in shaping its future success on the global stage.
Marshall Jen is Deputy Director of Hong Kong CPPCC Youth Association’s Economic Development Committee.