Hong Kong’s public finances are under rare pressure but there are clear reasons to maintain long-term confidence in the city’s future prosperity. I base this view on a rational assessment of what I know and see as a long-time business leader, investor and resident in the city.
My assessment framework has three lenses: risk and opportunity as well as leadership and execution.
Hong Kong’s risks and opportunities relate to the nature of its external and internal environments and how these are likely to change over the next five years. “Leadership” refers to the quality of those vested with financial decision-making and execution in the city. This puts financial secretary Paul Chan Mo-po in the hot seat so scrutinising his track record is important. Finally, “execution”, which refers to the coherence of the leadership’s action planning, is fundamental.
Against these factors though, we see considerable resilience through a number of key financial drivers in Hong Kong.
Banking deposits in the city rose by 5 per cent in 2023 and a further 6 per cent from January to November 2024. In equity markets, the Hang Seng Index soared by 18 per cent last year. Assets under management in Hong Kong topped US$4 trillion in 2023, up 30 per cent from 2018. Lastly, according to InvestHK, in 2024, more than 500 enterprises came to Hong Kong to expand or accelerate their businesses in the region.