Investors are still optimistic about Hong Kong despite US-China trade war, says InvestHK director general
- Number of business operations with parent companies outside Hong Kong climbed 6.4 per cent to 8,754 this year
The investment outlook in Hong Kong remains optimistic despite tensions arising from the US-China trade war, with the number of jobs created by foreign and mainland Chinese investors hitting a record high this year, according to InvestHK.
Its director general, Stephen Phillips, made the bullish forecast as the agency’s data showed that the number of business operations with parent companies outside Hong Kong climbed 6.4 per cent to 8,754 this year, compared to 8,225 in 2017. The number of regional headquarters also grew 8 per cent to 1,530 from 1,413 last year.
Phillips said the parent companies were mainly from the mainland, Japan, the United States, Britain and Singapore.
In terms of jobs, the number of people employed reached an all-time high of 485,000, compared to 443,000 in 2017.
The number of start-ups also increased to 2,625 this year, up 18 per cent from 2,229 in 2017.
The start-ups employed a total of 9,548 people, a 51 per cent rise over 6,320 in 2017. Of the founders, 62 per cent were from Hong Kong, and 35 per cent from outside the city, of whom 17 per cent came from Britain, 16 per cent from the US, 12 per cent from the mainland and 9 per cent from Australia.
Major sectors included fintech (16 per cent), e-commerce/supply chain management/logistics technology (11 per cent), professional or consultancy services (11 per cent), information, computer and technology (10 per cent).
The agency, which is responsible for attracting foreign direct investment to Hong Kong, also collected views from 8,754 firms on the attractiveness of the city as a location for setting up businesses. Favourable factors cited by the firms included “simple tax system and low tax rate” (67 per cent), “free flow of information” (62 per cent), “free port status” (59 per cent) and “geographical location” (59 per cent).
Phillips said the figures showed Hong Kong remained a magnet for overseas and mainland businesses with a thriving start-up ecosystem.
“Hong Kong continues to attract and retain leading overseas and mainland companies, as well as entrepreneurs from around the globe setting up leading edge and innovative businesses,” he said. “Companies are increasingly seizing new opportunities arising from the Belt and Road Initiative and the Guangdong-Hong Kong-Macau Greater Bay Area development.”
He held an optimistic view about the investment outlook in Hong Kong despite the US-China trade war because foreign investors were concerned about the long-term prospects.
“Based on the conversations with prospective investors around the world, we are still optimistic … the trade war is creating some uncertainties. Companies around the world are looking for opportunities for the longer term,” he explained.
“If we look at the economic fundamentals of Hong Kong and China, they remain strong.”
IT sector lawmaker Charles Mok said the government should actively promote the purchase of innovative products developed by local start-ups and lure big global firms to set up business in Hong Kong.
“The biggest problem is not the lack of incentives, but the lack of promotion within the government institution to purchase and use the new innovative products itself. If the government is willing to be their customers, it would serve as a good reference for local start-ups to promote their products overseas,” he said.