Despite Hong Kong’s increasingly violent political protests and rising tensions between protesters and the government, InvestHK remains “cautiously optimistic about the investment outlook in Hong Kong,” according to David Wong, head of strategic research.
“If we look at the economic fundamentals of Hong Kong and China, they remain strong,” said Wong in an interview with Greater Bay Insight. He added that the government body, which is tasked to attract and facilitate inward investment, continues to receive keen interest around the world and the pipeline remains healthy.
In its 2018 annual survey of companies in Hong Kong, InvestHK found 8,754 companies in the city with parent companies located outside Hong Kong, representing a 6.4% YoY growth. The growth was more prominent in the number of companies using Hong Kong as their regional headquarters, which had reached 1,530, up 8.3%.
“The companies tell us that the favorable factors are Hong Kong’s simple tax system and low tax rate, free flow of information, free port status and geographical location,” said Wong.
The ongoing mass protests against the now-suspended extradition bill and the city’s embattled government, however, have already hammered the city’s economy by souring shoppers’ appetite for spending and damaging retails sales.
Last week, HSBC cut its forecast for growth in mainland Chinese tourist arrivals into Hong Kong this year to 9%, shaving off 0.7% because of the citywide protests. The bank said in a report the ongoing turmoil would put off an estimated 350,000 tourists from the mainland.
None of this deters Wong. “Based on the conversations with prospective investors around the world, InvestHK is cautiously optimistic about the investment outlook in Hong Kong despite the recent difficulties because foreign investors are focusing more on the long-term prospects,” he said.
Hong Kong enjoys the dual advantages of being part of China, while maintaining its global outlook and institutional advantages, he added.
“The Guangdong-Hong Kong-Macau Greater Bay Area is of strategic significance for Hong Kong in two key aspects: diversification of the economy and of industries; and forming a quality living circle in the Greater Bay Area to expand the living space of Hong Kongers. It plays to Hong Kong’s fundamental strengths under the “One Country, Two Systems” principle, including international connection, trusted common law system and free flows of capital, information and talent,” Wong said.