Nearly 60% of 266 finance, accounting and business professionals in Hong Kong surveyed by accounting body CPA Australia are confident that the city’s GDP will grow between 2% and 4% next year. The economy expanded 3.6% in the third quarter of 2017.
There are more positive signals. Six out of ten respondents are confident that competitiveness will remain the same or improve in the coming year, according to the 2018 Hong Kong Economic Sentiment Survey. “Last year only 37% of respondents felt this way,” it notes.
The rosy outlook extends to salary increments. Nearly 60% of respondents expect salary increases of over 2.5% in 2018, roughly in line with expected GDP growth. But 47% say their company will not increase headcount.
China as ally, rival
Still, there were worries that the politicized environment (49%), high property prices (35%), rising costs (35%) and high office rentals (34%) could have a negative impact on economic performance.
And while half see China’s economic growth as a key driver of Hong Kong’s economic momentum in 2018, 58% also see Chinese businesses as posing the most serious challenge to Hong Kong’s competitiveness. Last year, Singapore was regarded as Hong Kong’s greatest competitor (46%), with 44% saying it’s China.
Greater Bay Area
Many of the executives surveyed remain firm believers in financial services (44%) and innovation and technology (42%) as the industries with the highest growth potential in the next three years.
To enhance competitiveness, a third of respondents want the Hong Kong government to exert greater effort to develop innovation and technology, while a fourth want to see greater support for businesses undertaking fintech activities in the city.
A third would like to see implementation of policies supportive of turning the so-called Greater Bay Area (comprising Hong Kong, Macau, Guangzhou, Shenzhen, Zhuhai, Foshan, Zhongshan, Dongguan, Huizhou, Jiangmen and Zhaoqing) into a global technology and innovation hub.
Other preferred courses of action include building infrastructure across the Greater Bay Area (31%), easing the movement of people across the cities (30%) tax reforms to encourage Greater Bay Area development (27%).