Hong Kong authorities are planning to attract medium-sized enterprises from mainland China by emphasising the city’s professional services. Finance Secretary Paul Chan has stated that they aim to develop Hong Kong into a multinational supply chain management centre. The city’s geopolitical tensions have created pressure for mainland companies selling to European and US markets, potentially leading them to relocate. Hong Kong officials will visit mainland Chinese cities with thriving private economies to showcase the professional services offered in the financial hub that can assist these firms in expanding their reach in overseas markets. Chan’s strategy involves providing one-stop services to these companies, eliminating the need to consider other places while catering to their overseas business needs.
The Hong Kong government’s proposal includes consulting services covering business operations, production, and supply chain solutions, trade financing options like export credit insurance and market update sharing, and corporate training on compliance and labour protection matters.
The finance chief did not disclose specific mainland cities to be visited but highlighted that the government would target those with strong private economies. Shanghai, Shenzhen, Guangzhou, Beijing, Chengdu, and Chongqing are among the cities with the highest number of private companies. The National Development and Reform Commission in China has pledged to further support the private economy, aiming to create jobs and clear the way for its growth.
Despite private mainland company investment declining by 0.5% year-on-year in the first 11 months of 2023, state-owned enterprise investment rose by 6.5%. The government also defends its strategy to boost tourism as a short-term economic recovery catalyst, with consumption being the primary driver.
Paul Chan believes that attracting more tourists will stimulate internal consumption, contributing significantly to the economy. The city’s unique fireworks and drone shows starting in May are expected to draw interest from sponsors and promotional activities from restaurants and retailers. Tourism Minister Kevin Yeung Yun-hung hopes to surpass the target of 46 million visitors this year, representing 70% of the 65 million tourists recorded in 2018. However, he acknowledges that it is too soon to set specific performance indicators regarding tourists’ length of stay and spending due to changing behaviour patterns.
The focus for tourism promotion efforts this year will be on Southeast Asia and the Middle East while attracting travellers from Europe and America remains a challenge. Hong Kong’s deficit is projected to reach HK$101.6 billion (US$17.4 billion) this financial year, leaving the city’s reserves at HK$733.2 billion, the lowest in a decade. Chief Executive John Lee Ka-chiu believes that the latest budget sets the direction for the city’s future economic development and aims to make Hong Kong’s economy even stronger.
Punit Shyam Gore
