Hong Kong News

Nonpartisan, Noncommercial, unconstrained.
Wednesday, Jul 24, 2024

The best remedy for Hong Kong’s ailing economy is talent

The best remedy for Hong Kong’s ailing economy is talent

The government’s strategy aims at expanding Hong Kong’s role as a finance, technology and trade hub to drive high-quality growth. For this we will need skilled workers from diverse backgrounds – will they come?

The most important sentence in Financial Secretary Paul Chan Mo-po’s budget speech this year appears in paragraph 134: “Talents are the most important resources for growth.” Clearly this was a reminder rather than fresh insight, the same point having been made by Chief Executive John Lee Ka-chiu in his policy address last autumn.

The annual budget speech is one of the two occasions each year when the government sets out its thinking on economic and social development. It has two main tasks: to flesh out with more detail the various initiatives previously outlined by the chief executive, and to explain how it’s all going to be paid for.

The economic backdrop has been grim. Gross domestic product fell by 3.5 per cent last year and exports of goods fell 13.9 per cent. Our economy is in recession. The top priority must be to return to a growth track with the emphasis on quality.

The budget set out the government’s plans to establish or strengthen our role as an international and regional centre in many areas: green technology and green finance; innovation and technology; financial, aviation and maritime services; trade; law and dispute resolution; cultural exchange; intellectual property trading. At the heart of all these ambitions is a skilled workforce.

The budget also had to take on board the recent report by the Census and Statistics Department. For three consecutive years our population has fallen and is now 7.3 million.

There is no magic number that would enable Hong Kong to fulfil its economic targets. A population that fell to 6 million would not mean we were sure to fail, and one that rose to 60 million would not guarantee success. What matters is the level of professional skills.

Financial Secretary Paul Chan takes questions from the media on the 2023-24 budget at the government offices in Admiralty on February 22.

Here the news has not been encouraging. At the personal level, we all know of high-quality professionals in our social or business circles who have packed up and left Hong Kong with their families. Some are expats returning to their home countries, or going elsewhere in the region; others are locals driven out by lack of employment prospects here or attracted by opportunity elsewhere.

The Covid-19 control measures still lingering here months after they have been dropped elsewhere have not helped.

A discussion on RTHK’s Backchat programme last week confirmed the anecdotal evidence: migration consultants reported the calibre of client they had been helping over the past two years was overwhelmingly the highly qualified people we would want to retain if we could. This is not surprising, as they are the ones best able to take their skills to another society.

In fairness, we should acknowledge that the new administration quickly recognised the weak hand it had inherited from its predecessor in this area. Lee announced four months ago the creation of the Office for Attracting Strategic Enterprises to attract businesses and talents. Chan reported the office had already begun assisting companies in establishing or expanding their business in Hong Kong.

The Top Talent Pass Scheme announced by Lee in the policy address has attracted more than 10,000 applications, some two-thirds of which came from the mainland.

That is fine; our country has many talented people and we need them. By making their home here, they bolster Hong Kong’s international role while benefiting the country and themselves. But as time passes I hope the scheme will become better known further afield. We need to attract a reasonable number of foreigners from elsewhere, including Westerners, if we are to maintain Hong Kong’s international flavour.

There are several other aspects of the budget worthy of comment.

One is the repeat of sweeteners, such as the HK$5,000 vouchers and the salaries tax reduction. These are very expensive in terms of government finances as expenditure or revenue foregone. But in economic terms they are largely irrelevant. I can only assume this was an attempt to boost community morale after a few tough years.

Then, there are the consequences for government reserves. The forecast deficit for the 2022-23 financial year is estimated to be nearly HK$140 billion (US$17.8 billion), higher than the original estimate of HK$56 billion. The fiscal reserves will fall to about HK$820 billion, a bit more than one year’s expenditure. This is manageable and still an enviable position compared to the massive accumulated debt in other advanced economies such as the United States and United Kingdom.

But we are not quite as flush as we once were. Chan is forecasting another substantial deficit for 2023-24. The number being widely quoted is HK$54 billion but the true number is HK$120 billion because the lower figure takes account of anticipated bond proceeds of some HK$65 billion.

As a qualified accountant, Chan knows well that such proceeds help with cash flow but they are not revenue in the accepted sense. They are debts that need to be repaid. The argument, which I accept, is that surpluses and deficits should be judged over the whole economic cycle, not just a few years of strong or weak circumstances.

Finally there is the “Happy Hong Kong” campaign. It will not be easy to judge the success or failure. Since we are still not allowed to see people’s faces, how will we know if they are smiling?


Related Articles

Hong Kong News
It's always the people with the dirty hands pointing their fingers
Paper straws found to contain long-lasting and potentially toxic chemicals - study
FTX's Bankman-Fried headed for jail after judge revokes bail
Blackrock gets half a trillion dollar deal to rebuild Ukraine
Steve Jobs' Son Launches Venture Capital Firm With $200 Million For Cancer Treatments
Google reshuffles Assistant unit, lays off some staffers, to 'supercharge' products with A.I.
End of Viagra? FDA approved a gel against erectile dysfunction
UK sanctions Russians judges over dual British national Kara-Murza's trial
US restricts visa-free travel for Hungarian passport holders because of security concerns
America's First New Nuclear Reactor in Nearly Seven Years Begins Operations
Southeast Asia moves closer to economic unity with new regional payments system
Political leader from South Africa, Julius Malema, led violent racist chants at a massive rally on Saturday
Today Hunter Biden’s best friend and business associate, Devon Archer, testified that Joe Biden met in Georgetown with Russian Moscow Mayor's Wife Yelena Baturina who later paid Hunter Biden $3.5 million in so called “consulting fees”
'I am not your servant': IndiGo crew member, passenger get into row over airline meal
Singapore Carries Out First Execution of a Woman in Two Decades Amid Capital Punishment Debate
Spanish Citizenship Granted to Iranian chess player who removed hijab
US Senate Republican Mitch McConnell freezes up, leaves press conference
Speaker McCarthy says the United States House of Representatives is getting ready to impeach Joe Biden.
San Francisco car crash
This camera man is a genius
3D ad in front of Burj Khalifa
Next level gaming
BMW driver…
Google testing journalism AI. We are doing it already 2 years, and without Google biased propoganda and manipulated censorship
Unlike illegal imigrants coming by boats - US Citizens Will Need Visa To Travel To Europe in 2024
Musk announces Twitter name and logo change to X.com
The politician and the journalist lost control and started fighting on live broadcast.
The future of sports
Unveiling the Black Hole: The Mysterious Fate of EU's Aid to Ukraine
Farewell to a Music Titan: Tony Bennett, Renowned Jazz and Pop Vocalist, Passes Away at 96
Alarming Behavior Among Florida's Sharks Raises Concerns Over Possible Cocaine Exposure
Transgender Exclusion in Miss Italy Stirs Controversy Amidst Changing Global Beauty Pageant Landscape
Joe Biden admitted, in his own words, that he delivered what he promised in exchange for the $10 million bribe he received from the Ukraine Oil Company.
TikTok Takes On Spotify And Apple, Launches Own Music Service
Global Trend: Using Anti-Fake News Laws as Censorship Tools - A Deep Dive into Tunisia's Scenario
Arresting Putin During South African Visit Would Equate to War Declaration, Asserts President Ramaphosa
Hacktivist Collective Anonymous Launches 'Project Disclosure' to Unearth Information on UFOs and ETIs
Typo sends millions of US military emails to Russian ally Mali
Server Arrested For Theft After Refusing To Pay A Table's $100 Restaurant Bill When They Dined & Dashed
The Changing Face of Europe: How Mass Migration is Reshaping the Political Landscape
China Urges EU to Clarify Strategic Partnership Amid Trade Tensions
The Last Pour: Anchor Brewing, America's Pioneer Craft Brewer, Closes After 127 Years
Democracy not: EU's Digital Commissioner Considers Shutting Down Social Media Platforms Amid Social Unrest
Sarah Silverman and Renowned Authors Lodge Copyright Infringement Case Against OpenAI and Meta
Why Do Tech Executives Support Kennedy Jr.?
The New York Times Announces Closure of its Sports Section in Favor of The Athletic
BBC Anchor Huw Edwards Hospitalized Amid Child Sex Abuse Allegations, Family Confirms
Florida Attorney General requests Meta CEO's testimony on company's platforms' alleged facilitation of illicit activities
The Distorted Mirror of actual approval ratings: Examining the True Threat to Democracy Beyond the Persona of Putin
40,000 child slaves in Congo are forced to work in cobalt mines so we can drive electric cars.