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Hong Kong economy

Hongkongers most confident of economy in three years, survey finds

Nearly two thirds of respondents say the city’s competitiveness would remain unchanged or improve in 2018, up from 37pc in the projection for 2017

PUBLISHED : Wednesday, 29 November, 2017, 7:00am
UPDATED : Wednesday, 29 November, 2017, 7:00am

Confidence in Hong Kong’s economic competitiveness is at its highest in three years, with innovation and technology seen to be the city’s future driving forces, a survey released on Tuesday has found.

Sixty per cent of the respondents believed that the city’s competitiveness would remain unchanged or improve in 2018, increasing from 37 per cent in the projection for 2017, and just 32 per cent for 2016 in previous surveys.

The survey by CPA Australia, one of the world’s largest accounting bodies, polled 266 financial, accounting and business professionals between October 20 and November 13, 2017.

“Business experts expect Hong Kong to maintain its position as one of the world’s most competitive markets in which to do business,” said Ivan Au, divisional president of Greater China, CPA Australia.

Proximity to a rapidly growing mainland China, infrastructure projects boosting connectivity between Hong Kong and the mainland, and the city’s tax system were the three main favourable factors to drive Hong Kong’s economic growth in the coming year, the survey findings showed. But on the flip side, the local political environment, high property prices and rising costs were factors that could hinder development.

Over a third of the respondents surveyed believed a greater emphasis by the Hong Kong government on developing innovation and technology was the best way to improve future competitiveness.

The city has already seen developments in fintech – technology to deliver financial services – but more capital and expertise were needed for it to become a competitive market, divisional councillor for Greater China, CPA Australia, Roy Lo said.

Lo said many new companies had set up shop in Cyberport, where a presence in Hong Kong would put them closer to the “very big market in the Greater Bay Area in China”.

But for fintech to grow as a competitive industry, CPA Australia said Hong Kong’s capital market needed to inject funding into innovation and technology, and nurture home-grown talent and import expertise from abroad.

Business experts expect Hong Kong to maintain its position as one of the world’s most competitive markets in which to do business
Ivan Au, CPA Australia

Traditional accountancy, law and banking professions had set up departments focusing on fintech to train employees on how to develop the industry, said Lo, an accountant.

“The problem is we don’t have many fintech experts,” he said. “We need people who have good ideas about how to market the fintech companies and sell fintech knowledge to the general public.”

Hong Kong chief executive Carrie Lam Cheng Yuet-ngor has focused on innovation and technology as an area to invest in since stepping into office in July.

Hong Kong’s ‘last chances’ to maintain its global economic standing

In her 2017 policy address, she pledged to double the expenditure on research and development for innovation and technology from 0.73 per cent to 1.5 per cent in the next five years, and committed the Innovation and Technology Bureau to launch a HK$500 million “Technology Talent Scheme” to encourage young people to engage in research and product development.

“The survey results indicate that the government is focusing on the right industries and policies, and this seems to be increasing the overall positive economic sentiment and confidence in Hong Kong’s global competitiveness,” Au said.