Hong Kong losing competitive edge to Singapore, Shanghai and has yet to face worst of trade war impact, poll finds

Hong Kong is losing out to Singapore, Shanghai, Shenzhen and Tokyo in terms of competitiveness, according to a survey conducted by accounting body CPA Australia. Its economy is likely to be hit hard by the US-China trade war next year, according to the poll.

About half of the respondents said they expected the city’s competitiveness to drop, with only 12 per cent viewing it as the most globally competitive city in Asia. Hong Kong, however, did rank higher than Seoul, Beijing and Guangzhou, among others.

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“The deteriorating trade relationship between the US and China, anticipated lower economic growth in mainland China and high property prices are factors most likely to drag on the Hong Kong economy in 2019,” said Paul Ho, president for Greater China at CPA Australia.

Half of the respondents also said they believed the worst had not yet been witnessed, and expected property prices in Hong Kong to fall further as its economic outlook got gloomier in 2019. More than a third said companies in the city had not taken any measures to mitigate the risk of the trade war, which was adding to the gloomy outlook for Hong Kong’s economy and, hence, hurting its competitiveness.

Ho said the impact of the trade war may not yet be visible to small and medium enterprises.

While the CPA Australia study may have interviewed only 178 of its members in October, it was in line with another survey, whose findings the International Institute for Management Development released on Tuesday. According to this poll, Hong Kong was lagging behind its Southeast Asian peers in terms of attracting and retaining talent.