A new business sentiment survey by the American Chamber of Commerce in Hong Kong (AmCham) in partnership with Ipsos Business Consulting finds that Hong Kong remains a favorable and unique hub for international business with strong competitiveness to access China and the Asia Pacific markets. However, access to government over major business decisions and government policy unpredictability were flagged as potential impediments to diversifying and transforming the city's economy.
AmCham launched its new, annual business sentiment survey, successfully interviewing 230 members in the last 3 months on a broad range of issues from the overall business environment to opportunities and challenges surrounding the Greater Bay Area and innovation and technology. An overwhelming majority of respondents felt that Hong Kong remains competitive with its Asian rivals in terms of soft assets, such as culture, institutions and the rule of law, as well as hard infrastructure. But there is no room for complacency: just over half of respondents believe the overall quality of the business environment is staying the same, while just over a quarter thought it was deteriorating.
The survey shows that no other cities in Asia replicate Hong Kong in doing business with the same strong legal institutions and freedoms. Some warnings were sounded about how Hong Kong is evolving within the One Country, Two Systems framework, although perceptions were mixed. About half of the total respondents (52.9%) believed that there has been some erosion of the core values of the One Country, Two Systems model; over one-third (38%) disagreed that it is just a perception given out by the media and that they have not experienced any real examples in business activities.
"The survey offers some honest views of international business executives, who remain enthusiastic about what Hong Kong can offer amid the fast-growing economies of Asia. The results show that the traditional advantages of Hong Kong as an international business hub are still soundly in place, and there is ample opportunity for it to evolve further as a global super-connector," said Jack Lange, Chairman of AmCham. "However, they also show some concern about whether the Hong Kong Government can adapt to the pace and scope of innovation required for success in the current business environment."
Around 60% of the respondents believed opaque data access and a conservative bureaucratic approach remain the greatest challenge for Hong Kong in the smart city race. While 33% of respondents saw China's cybersecurity law – which does not apply in Hong Kong – as a concern.
AmCham members are optimistic (70% of the respondents) about opportunities and potential revenue to be generated from the 67 million population market in the Greater Bay Area (GBA) leveraging connectivity between Hong Kong and the GBA cities. Although over half of the respondents have already had an office in the GBA outside of Hong Kong, 14% of the remaining half indicated interest to expand into the GBA in the near future.
"The business community is keen to hear more concrete details about GBA by the governments involved, to understand real business opportunities. But already, some respondents see Hong Kong as a strong base to take part in GBA economic activities thanks to new transport links and the comfort factor of operating in this city," said Tara Joseph, President of AmCham Hong Kong.
Talent remains a major concern from respondents, echoing the Chamber's longstanding calls for a revamp of the education system to proactively bring in creative strategies and move away from the attachment to pure academic achievements. Respondents also rated a strong talent pool as one of the top three priorities necessary for Hong Kong to remain a global business hub.