Which measures are most likely to improve Hong Kong’s international competitiveness?

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Responses from 208 accounting and finance professionals point to "measures to attract companies and investment" as the most important.

Close to half (49%) of the business leaders surveyed in Hong Kong are anticipating the economy to grow slightly in 2024, according to a CPA Australia survey of 208 accounting and finance professionals in the city. Of these, one-third (36%) predict the economy will grow by less than 3% per cent.

To boost economic growth and strengthen international competitiveness, respondents were most likely to hope for the government to implement the following measures in order of response sizes:

• Measures to attract companies and investment - 46%
• Strengthening policies to attract and retain talented individuals - 30%
• Improving the low and simple tax system - 25%
• Greater support for innovation and technology - 25%
• Negotiating favourable policies with the Greater Bay Area and the Mainland - 25%
• Enhancing Hong Kong's capacity to host large-scale international events - 24%
• Closer economic and trade connections with ASEAN and Middle East markets - 20%
• Reduction in interest rates - 19%
• Increased land and housing supply - 13%
• Enhancing digital infrastructure and connectivity - 10%
• Measures to support upskilling and reskilling of local workers - 9%
• Measures to support green finance - 8%

Commenting on these, CPA Australia 2023 Divisional President of Greater China Robert Lui said: "Hong Kong’s economic and business activities have been steadily normalising and recovering this year. Government policies to attract companies, investment and talent are helping Hong Kong return to the world stage."

He also stressed on the challenges ahead: “Cyclical and structural uncertainty in the global market will likely weaken demand. Geopolitical tensions may also slow capital flows and investment activities. Businesses should be cautious as these downside risks may constrain economic growth next year."

Respondents were also asked about their companies' strategic focus in 2024, to which the answers were:

• Cost management - 39%
• Improving business efficiency - 36%
• Improving cash flow - 29%
• Attracting, retaining and developing talent - 26%
• Improving customer satisfaction - 22%
• Expanding into new markets or increasing business activities overseas - 20%
• Innovation and technology including digital transformation - 19%
• Introducing new products or services - 14%
• Environmental, social and governance (ESG) initiatives - 12%
• Cybersecurity and data governance - 8%
• Improving supply chain management - 4%

Facing economic headwinds, respondents were more conservative in their forecasts for their business. Just over two-thirds (68%) expect their company’s revenue to increase or remain largely the same next year, down from 73% in 2023.

Lui shared: "Despite expected weak customer demand, companies must keep innovating to cater for new consumer behaviour. Besides, companies should explore new overseas markets. It’s therefore a good sign that one-third expect to increase sales and marketing activities outside of Hong Kong next year."

Interestingly, hiring intentions have increased, especially amongst smaller companies. A total of 38% of respondents expect their companies’ headcount to increase, up from 31% in 2023. On the employees' side, 64% plan to make no change in their job or seek an internal promotion, with only 17% planning to change employers.

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Lead image / CPA Australia survey