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Opinion | At an economic crossroads, Hong Kong needs a proactive strategy
- Although the Greater Bay Area will provide an economic relaunch pad, the city can’t afford to be a passive player adapting to paths defined by others
- With Hong Kong facing a supply bottleneck in land, labour and capital, opening multiple routes for talent from around the world is also vital
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The theme of Chief Executive John Lee Ka-chiu’s second policy address was “A vibrant economy for a caring community” and more than one-fifth of the speech was devoted to consolidating Hong Kong’s advantages and building a diversified economy.
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A range of measures were set out – to raise competitiveness, grow the innovation and technology ecosystem, attract companies to redomicile in the city, attract and retain talent, revitalise tourism, and press ahead with the Northern Metropolis as the new engine for growth.
All are laudable directions. But while advantages and opportunities remain, the challenges are deeper than often recognised.
Financial Secretary Paul Chan Mo-po has just warned that the deficit for this fiscal year could exceed HK$100 billion (US$12.8 billion), far more than the HK$54.4 billion estimated in the budget at the beginning of the year. This follows an equally significant underestimation last year, for which the deficit estimate more than doubled from HK$56 billion to HK$140 billion.
In his budget, Chan forecast the economy to grow between 3.5 and 5.5 per cent this year, riding on expectations of post-Covid “revenge” consumption and inbound tourism, while assuming a strong rebound on the mainland.
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In August, the forecast was revised to 4-5 per cent. Now, given the lacklustre performance in exports and investments, actual growth is likely to be lower.
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