Mr YUEN Mo (Chairman of the 52nd terms of office) December 2021
As Hong Kong’s economy gradually recovers, our society can look forward to the resumption of quarantine-free travel with the Mainland soon, followed by a reenergized local business environment.
The two issues that concern the Hong Kong business sector the most these days have been the resumption of quarantine-free travel between the Mainland and Hong Kong, and the development of Sino-US relations. The good news is that the HKSAR government has confirmed that it is moving on to get fully prepared for the implementation of orderly resumption of quarantine-free travel. Meanwhile, the recent virtual China-US presidential meeting has created a breathing space amid rising tension between the two nations, which improves the outlook for Hong Kong’s economy and business environment.
Normal travel should be resumed as soon as possible
Earlier, the Chief Executive said she hoped that the opening of the border between the Mainland and Hong Kong could be of a certain scale by February 2022. Shortly after, a Mainland epidemic prevention and control expert delegation conducted an inspection visit in Hong Kong, and the second meeting on the anti-epidemic work between Guangdong and Hong Kong governments was held in Shenzhen. John Lee, Chief Secretary for Administration of the HKSAR, said the Mainland experts considered that Hong Kong has basically achieved the conditions of resumption of quarantine-free travel, and the government is pressing ahead to implement the measure. The news is no doubt encouraging for the business sector and society at large.
In our opinion, before quarantine-free travel should be resumed, all sectors must support the HKSAR government in strengthening Hong Kong’s anti-epidemic efforts, and ensuring that the quarantine-free travel mechanism is well planned to avoid confusion once the measure is implemented. The HKSAR government should also boost the vaccination rate to provide a solid ground for the full resumption of travel between the Mainland and Hong Kong.
Mitigated China-US tension is favorable to business development
During their virtual meeting last month, the Chinese and US presidents emphasized the importance of peaceful coexistence and the need to ensure that competition between the two countries would not veer into conflict. The meeting was a significant step toward reestablishing a steady relationship between China and the US, and sent a hopeful message to Hong Kong businesses.
That said, the meeting did not result in any breakthroughs in the relationship between the two sides, whose ideologies continue to diverge. In fact, the US-China Economic and Security Review Commission called for imposing restrictions on US investment in China, and criticized the National Security Law and the improved electoral system, a clear sign that uncertainties remain in the development of Sino-US relations.
Hong Kong stays attractive to foreign investments
In reality, the implementation of the National Security Law over a year ago has effectively restored social order in Hong Kong. The improved electoral system also allows the “patriots administering Hong Kong” principle to be truthfully upheld. By creating a stable environment, these policies help bolster the confidence of local and overseas investors.
The 2021 Report on Annual Survey of Companies in Hong Kong with Parent Companies Located outside Hong Kong released by the Census and Statistics Department shows that the number of overseas and Mainland companies in Hong Kong has reached record high. Nearly 60% of the surveyed companies indicated that their business plans in Hong Kong would remain unchanged in the coming three years, reflecting a general optimism about the future for businesses in Hong Kong. In addition, the number of start-ups in Hong Kong has increased to 3,755 in 2021. Of these, nearly 30% were founded by non-locals, another sign of the unyielding appeal of Hong Kong’s business environment to overseas entrepreneurs and investors.
The country’s concrete support is vital to Hong Kong’s competitiveness. The “14th Five-Year” Plan not only offers continued support for the city to enhance its status as four “traditional centers”, but also awards new impetus for it to establish itself as four “emerging centers”. The unwavering support empowers Hong Kong to continue leveraging its pivotal role under the “what the country needs, what Hong Kong is good at” strategy. The proposal in the latest Policy Address to develop the Northern Metropolis and foster the development of a science and technology innovation corridor will allow Hong Kong to take its unique role and competitive edge even further.
As Luo Huining, Director of the Liaison Office of the Central People’s Government in the HKSAR, said, the biggest opportunity for global development lies in China, and the biggest opportunity for Hong Kong’s development lies in the Mainland. With backing from the motherland, Hong Kong continues to enjoy an unrivalled business environment, which draws both Mainland and overseas investments. As Hong Kong’s economy gradually recovers, our society can look forward to the resumption of quarantine-free travel with the Mainland soon, followed by a reenergized local business environment.