Welcome economic boost no reason for Hong Kong to rest on laurels
- The city can celebrate the return of economic growth after such hard times, but with the increase in visitors it has to remain competitive
It is beginning to feel like the city’s wishes just keep coming true – the border reopening, the end of Covid pandemic measures, the revival of the Hong Kong Rugby Sevens and the “golden week” of mainland tourism, and now the icing on the cake: the return of economic growth essential to prosperity.
The city’s gross domestic product grew by 2.7 per cent in the first three months of the year, snapping four consecutive quarters of contraction.
Moreover, the International Monetary Fund has confirmed a forecast of economic growth for the full year, although lowering it by 0.4 percentage points from a forecast six months ago to 3.5 per cent.
This is in line with a forecast of 3.5 per cent to 5.5 per cent growth in a recent government assessment of the city’s economic situation.
Buoyed by the golden week influx of mainland tourists – expected to total about 600,000 – Chief Executive John Lee Ka-chiu has forecast an even better GDP performance in the second quarter, and also a better one this year than last.
The turnaround did not just happen with the lifting of Covid-19 measures. As Lee said, a series of large-scale promotional activities, at home and abroad, has helped stimulate tourism and consumption and boost the economy.
The rapid growth of the mainland economy and recovery of the aviation sector will sustain the lift and also help make the second quarter even better, despite a continuing fall in exports during the first.
Although so much of normal life was put on hold for so long during the pandemic, the world did not stand still. That was evident in two marked respects during golden week.
One has been the more diverse interests of the latest mainland visitors. They range from the usual shopping hotspots to places of special interest such as historic sites, to country parks and the food experiences of outlying islands. This will put Hong Kong’s renowned ability for adaptation to the test.
Hong Kong restaurants buoyed by 30 per cent growth over holiday weekend
The other was the scale of the exodus of visitors after one day in Hong Kong, partly attributable to higher hotel room rates for the week. It also reflected improved transport links, which make day trips and return visits during the week more practical.
These differences serve as a reminder to the tourism industry, a key pillar of the city’s economy, to be mindful of changes in visitors’ preferences and patterns of consumption, and the need to keep up with or stay ahead of trends if Hong Kong is to remain competitive.
The resurgence of cross-border tourism did not go without tensions, from disturbances blamed on tour groups in local or island neighbourhoods to crowding caused by tour parties in urban food stops.
Tolerance and understanding on both sides would be in the best interests of a city that relies so much on tourism and a reputation for a safe, welcoming environment.
