On Hong Kong’s economic recovery, John Lee must beware of overpromising and underdelivering
- Economic relief from reopening will take time to gather momentum amid global uncertainties and with the wounds of 2019 still fresh
- With encouraging macroeconomic data unlikely to emerge before the end of the year, impatience in promising an imminent recovery is almost certain to backfire
Ask any good corporate public relations consultant for the cardinal rule in company communications, and the answer is likely to be: “Underpromise, overdeliver.” However strong the urge to sell a positive story, executives should beware the temptation to “overegg” performance or forecasts. Falling short will only disappoint and breed scepticism.
“Rest assured, we’ll go fast in a safe and orderly manner towards our shared goal of everything resuming as normal as soon as practicable and possible,” he promised, adding that he and colleagues would be “running” around the world after the Lunar New Year to promote Hong Kong.
One can feel sympathy. And I am part of the community that retains confidence in Hong Kong’s long-term prospects. But impatience in promising an imminent recovery is almost certain to backfire. Too many people worldwide remain wedded to a negative narrative for Hong Kong that is regularly refreshed by international politicians and pro-democracy activists whose views seem more readily trusted than those of Hong Kong officials.
Negativity towards Hong Kong is in some parts of the world indelibly linked to negativity towards Beijing, and is something our administration can do little about, however busily officials run around the world selling our positive story.
Evidence is thin on the ground in Hong Kong to contradict this wary forecast: the economic relief from the reopening of Hong Kong and the mainland will take time to gather momentum, and is unlikely to show results in the retail, tourism, hotel or restaurant sectors until well after the Lunar New Year.
Reopening mainland border isn’t a cure-all for Hong Kong’s economic woes
Our role as a hub for headquarters is more critical than most acknowledge, since it drives not just our financial sector, but also our legal and accounting sectors.
I am willing to argue that Hong Kong’s role as a headquarter hub is likely to recover but the data to underpin this narrative is unlikely to be available until late in 2023.
Revenues have been depleted by a sharp fall in corporate and income tax payments, by lower land auction revenues and with declining stamp duties for stock and property market activity. Chan’s February 22 budget is set to paint a challenging story for 2022, with cautious forecasts for the year ahead.
Impatient as Lee may be to shift the Hong Kong narrative to the positive, the dull reality is that it will take time to attract the data needed to make it credible. Meanwhile, better to underpromise and hope to overdeliver.
David Dodwell is CEO of the trade policy and international relations consultancy Strategic Access, focused on developments and challenges facing the Asia-Pacific over the past four decades