Hong Kong government implements measures to boost economy amidst economic challenges

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22nd November 2023 – (Hong Kong) Hong Kong is facing economic challenges with sluggish growth and a low turnover in the stock market. The International Monetary Fund (IMF) has also projected a significant slowdown in global economic growth over the next five years. In response to these challenges, the Hong Kong government has outlined measures to boost the economy and foster consumer confidence.

In a recent government statement, it was highlighted that inbound tourism and private consumption will remain key drivers of economic growth for the remainder of the year. To address the changing consumption demands of the public and enhance consumer confidence, the government plans to take corresponding actions in terms of consumption supply. The aim is to encourage Hong Kong residents to stay and spend within the city by providing a diverse range of cultural experiences, eateries, and shops. This strategy includes the launch of various events such as the “Happy Hong Kong” series, which features Gourmet Marketplaces, the Harbour Chill Carnival, and the Cinema Day. These events aim to create an energetic atmosphere on the streets and revitalize consumer sentiment.

To further stimulate consumer spending, the government has organised the “Night Vibes Hong Kong” campaign. This campaign, which started in September, features a range of night-time events focused on leisure, arts, culture, and retail consumption. Festivities include the National Day, Halloween, Christmas, and the New Year celebrations. The campaign has received positive responses from various sectors, with significant attendance and participation in events. These efforts aim to foster a revitalized post-pandemic atmosphere and encourage consumer spending.

In addition to promoting local consumption, the government is also focused on attracting visitors to Hong Kong. The Hong Kong Special Administrative Region (HKSAR) Government launched the “Hello Hong Kong” global promotional campaign in February 2023. The Hong Kong Tourism Board (HKTB) has played a key role in this campaign, organizing various promotional activities to showcase Hong Kong’s diverse appeals. As part of the campaign, the HKTB distributed around two million “Hong Kong Goodies” visitor consumption vouchers, each valued at $100. These vouchers can be redeemed for free welcome drinks or offers at designated establishments.

Collaboration with online platforms has also been leveraged to attract visitors. The HKTB partnered with Xiaohongshu, a popular Mainland Chinese online platform, to launch programs such as the “Hong Kong Travel Time Machine” and “Art Travel to Hong Kong.” These initiatives generated significant exposure for Hong Kong tourism, with over 200 million total impressions. To further entice visitors, the HKTB has distributed one million sets of “Hong Kong Night Treats” visitor dining coupons, valued at $100 each. The coupons encourage visitors to explore Hong Kong’s night-time offerings, particularly its wine and dine scene.

To enhance tourism experiences, the government has organized large-scale events and festivals. These events include the Hong Kong International Dragon Boat Races, Harbour Chill Carnival, Hong Kong Cyclothon, Hong Kong Wine & Dine Festival, Hong Kong WinterFest, Art Basel Hong Kong, the Hong Kong Sevens, Hong Kong Pop Culture Festival 2023, Hong Kong New Year Countdown Celebrations, and Hong Kong Chinese New Year Celebrations. These events aim to showcase the vibrancy and diversity of Hong Kong’s culture and attract visitors.

In addition to targeting visitors from Mainland China, the government has also introduced measures to attract visitors from other countries and regions. The “Design District Hong Kong” creative tourism project was launched to promote Tsuen Wan as an emerging tourist destination through art installations and cultural activities. The government has also transformed the Cultural and Heritage Sites Local Tour Incentive Scheme into the Characteristic Local Tourism Incentive Scheme. This scheme provides support and incentives for the development of more thematic tours to further facilitate tourism growth.

The Middle East region has a plethora of natural resources and has been actively seeking to diversify its economy and reduce reliance on income from the oil industry. This shift has created new business opportunities and investment projects in the region. Recognizing the potential, the Hong Kong Special Administrative Region (HKSAR) Government has been focusing on strengthening bilateral relations with Middle Eastern countries and promoting trade and economic ties.

In February 2023, the Chief Executive of Hong Kong led a high-level business delegation to visit the Middle East region, specifically Saudi Arabia and the United Arab Emirates (UAE). The purpose of the visit was to highlight the unique advantages of Hong Kong as a business destination. During the visit, Hong Kong enterprises and institutions signed 13 high-quality memoranda of understanding or letters of intent with Saudi Arabian and UAE counterparts, laying a strong foundation for long-term business development in the Middle East. These agreements also aimed to attract local businesses and capital to invest in Hong Kong.

Building upon the success of the Chief Executive’s visit, the HKSAR Government and the Hong Kong Trade Development Council jointly organised the 8th Belt and Road Summit in September 2023. At the summit, a “Middle East Forum” was introduced, promoting around 50 investment and cooperation projects in the Middle East region. This platform facilitated the signing of 21 additional memoranda of understanding or letters of intent, with six of them specifically related to the Middle East. The agreements covered various sectors such as sustainable energy, construction resources, and research and development.

To further strengthen trade and economic ties, the HKSAR Government established the Hong Kong Economic and Trade Office (ETO) in Dubai in October 2021. This marked the 14th overseas ETO and the first one in the Middle East region. The Dubai ETO has played a vital role in fostering closer trade and economic relations between Hong Kong and the Gulf Cooperation Council (GCC) member states. It has actively encouraged Hong Kong enterprises and professionals, particularly in logistics, construction, finance, law, accounting, and management, to explore opportunities in the rapidly developing Middle East market.

Hong Kong’s unique position under the “one country, two systems” principle has been leveraged to its advantage. The city enjoys strong support from the Chinese government and maintains close connections with the rest of the world. Hong Kong serves as a “super connector” and “super value-adder,” offering abundant opportunities for enterprises and investors from the Middle East to participate in national development strategies like the Guangdong-Hong Kong-Macao Greater Bay Area and the Belt and Road Initiative. To solidify and enhance trade and economic cooperation, Hong Kong has concluded investment agreements with Kuwait and the UAE, and is actively conducting investment agreement negotiations with Bahrain and Saudi Arabia. Bilateral free trade agreements with Middle Eastern economies, such as the UAE, are also being explored.

To attract enterprises from other countries and regions to invest in Hong Kong, the HKSAR Government has implemented various measures. For instance, a mechanism is being introduced to facilitate overseas companies to re-domicile in Hong Kong. Efforts are also being made to attract global family offices and asset owners through measures like the Capital Investment Entrant Scheme, tax exemptions, and the Network of Family Office Service Providers. Delegations comprising Hong Kong and Mainland enterprises are being organized to visit countries along the Belt and Road, showcasing Hong Kong’s world-class professional services and enticing local enterprises to establish a presence in Hong Kong.

The current term government places significant emphasis on investment promotion. The Office for Attracting Strategic Enterprises (OASES), established in December 2022, focuses on attracting high-potential enterprises from around the world to Hong Kong. Since its establishment, OASES has engaged with over 200 strategic enterprises, with 30 of them planning to establish or expand their operations in Hong Kong. These investments amount to approximately $30 billion, which is expected to create around 10,000 employment opportunities. The OASES has become an official partner to the first batch of 20 strategic enterprises through the Launching Ceremony of OASES Partnership, working together to promote the development of Hong Kong’s innovation and technology ecosystem.

Furthermore, Invest Hong Kong (InvestHK) continues to actively support overseas and Mainland enterprises interested in establishing or expanding their operations in Hong Kong. Apart from consultant offices in Nairobi, Kenya, and Almaty, Kazakhstan, the investment promotion network under the Dubai ETO has been strengthened. In the first nine months of the year, InvestHK assisted 300 Mainland and overseas enterprises in setting up or expanding in Hong Kong, representing a more than 25% increase compared to the same period last year. The diverse range of enterprises from different industries and regions choosing Hong Kong demonstrates its attractiveness as an international business centre. In the coming years, InvestHK and the Hong Kong Trade Development Council plan to establish consultant offices along the Belt and Road to actively engage high-potential enterprises and talents, further attracting businesses from emerging countries to establish a presence in Hong Kong.