To understand its members’ views on the prospects for the economic and business environments, the Chamber conducted a member survey in February1. Respondents were cautious about Hong Kong’s economic and business prospects this year. Faced with the ongoing resurgent COVID-19 pandemic, they hoped that the HKSAR government would take more decisive measures to contain the pandemic so that the economy and people’s livelihood will return to normal as soon as possible. In addition, many Hong Kong businesses are positive about the Guangdong-Hong Kong-Macao Greater Bay Area (Greater Bay Area) and are prepared to invest in the area to expand or develop their business.
Economic and business prospects
Compared with 2020, what changes are expected in Hong Kong’s overall economic environment and business environment this year?
Four out of ten respondents expected the overall economy (41%) and business environment (39%) to improve, while more than three out of ten believed that the overall economy (34%) and business environment (38%) will deteriorate.
Compared with 2020, are your company’s business operations expected to improve or deteriorate this year?
Over four out of ten (43%) of respondents expected their company’s business operations to improve this year, mainly with an expected increase in revenue (48%) or an expected increase in customers (41%); however, about one out of four (24%) respondents expected business operations to deteriorate, with a decline in revenue (67%) their main worry. Three out of ten respondents expected business operations to remain at the same level.
Respondents were more cautious about this year’s employment situation, with nearly six out of ten (58%) worried that it would worsen, while three out of ten (31%) expected it to improve. They would generally keep the company’s staffing (60%) and overall salary expenditure (54%) unchanged this year.
How confident are you in your company’s business growth this year?
On the whole, respondents were quite positive about the company’s business growth this year, with nearly half (47%) expressed confidence, while fewer than one out of ten (9%) expressed no confidence.
Exploring space for market development
Does your company participate in the following markets, or plan to develop/expand the relevant businesses?
Faced with the new global economic landscape, actively exploring the Mainland and other regional markets will bring new opportunities for Hong Kong’s industrial and commercial sectors to promote sustainable business development. About half of respondents are already participating in the Greater Bay Area (46%) and other markets in the Mainland (43%) The Mainland is the market where the most respondents want to tap into, with nearly four out of ten (39%) intending to further expand or develop their businesses in the Greater Bay Area and 35% considering to expand or develop their businesses in other markets in the Mainland. Relatively, about two out of ten respondents have businesses in ASEAN (18%) or the Belt and Road market (21%), while 28% and 24% are considering expanding or developing their businesses in the relevant markets, respectively.
Hoping for specific support for the business community
Hong Kong’s economy has faced unprecedented challenges and many industries have been hit hard by COVID-19 over the past year. The HKSAR Government has been actively promoting pandemic prevention and control efforts and providing support to affected businesses to help them get through the difficult times.
Respondents believed that the HKSAR Government should take more decisive measures to cope with the pandemic so that the economy and people’s livelihood will return to normal development as soon as possible, and introduce more support measures for businesses in a timely manner to help them adapt to changes in the business environment in the short, medium and long term, and enhance Hong Kong’s overall competitiveness.
In addition, respondents generally hoped that the HKSAR Government would provide more policy support to help businesses tap into the Greater Bay Area, the Mainland and overseas markets.
The Chamber’s recommendations
Although respondents were cautious about the overall economy and business environment, they were generally confident of the business prospects for their company this year. They hoped that the HKSAR government would take more decisive measures to deal with the pandemic so that business operations in various industries can return to normal as soon as possible, and provide more support measures to help businesses tap into the business opportunities in the Mainland, especially in the Greater Bay Area.
The Chamber agrees that the current priority is to successfully curb the pandemic. It is only then that the various economic stimulus and business support measures can be truly effective and all sectors can focus on promoting post-pandemic economic development and capture the opportunities arising from the country’s “14th Five-Year Plan” and new “dual circulation” development paradigm.
The Chamber has the following recommendations for post-pandemic economic development and Hong Kong businesses to tap into the Greater Bay Area market:
Boosting post-pandemic economic development
- Allocate more fiscal resources and take more decisive measures to contain the pandemic by stepping up testing, contact tracing, and vaccination support and publicity to cut off the transmission chain to achieve the goal of “zero infection” as soon as possible.
- Speed up the process of issuing electronic consumption vouchers and consider holding largescale promotional activities with the retail and F&B industries to further improve the market atmosphere.
- Further increase the maximum loan amount for SME financing guarantees and extend the repayment period to assist SMEs in stabilizing cash flow and alleviating the pressure on operation and capital turnover.
- Implement the mutual recognition system for the health codes of the Mainland and Hong Kong as soon as possible, granting vaccinated residents of the two places exemption from quarantine so that crossborder personnel travel and economic and trade activities can return to normal.
Deepening integration with the Greater Bay Area
- Accelerate the integration between Hong Kong and the Greater Bay Area in cross-border infrastructure, strengthening the highspeed rail network connectivity and fully implementing the colocation arrangement.
- Assist Hong Kong businesses in establishing sales networks in the Greater Bay Area and other Mainland cities, set up a dedicated department to solve practical operational problems, and provide one-stop market information and business development support.
- Deepen cooperation between the science and technology industries of Hong Kong and the Greater Bay Area, providing matching of scientific research talents between Mainland and Hong Kong enterprises in the new Shenzhen-Hong Kong Innovation and Technology Co-operation Zone in the Lok Ma Chau Loop for stronger industry-academia-research cooperation.
- On the basis of the “Greater Bay Area Youth Employment Scheme”, encourage the Guangdong and Hong Kong governments to establish a long-term employment mechanism and special tax concessions to provide more incentives and support for young Hong Kong people to find employment or start business and live in the Greater Bay Area.