The helicopter view
Officially the Hong Kong Special Administrative Region of the People’s Republic of China – with a population smaller than London’s – this former British colony is just south of Shenzhen in the South China Sea.
According to Bloomberg, it’s the world’s 7th largest port, built on trade and finance. It has no tariffs on imported goods, and levies excise duty on just four commodities. Half its trading value comes from China. But the triple whammy of the US-China trade war, pro-democracy protests and coronavirus sees Hong Kong’s outlook seem less certain. Last year, it entered recession for the first time in a decade.
Hong Kong received $115bn in foreign investment in 2018, while 80% of investments are linked to financial activities.
The World Economic Forum ranks it 7th for global competitiveness, and it is 3rd in the World Bank’s Doing Business report.
Supply chain issues
Further political unrest could encourage organisations to switch their shipments away from Hong Kong to cities like Shenzhen (with its own deepwater port), while Hong Kong’s status as the world’s busiest hub for air cargo traffic could also be under threat.
Political unrest notwithstanding, its six-day week sees staff clock 50.1 hours a week, which is starting to be seen as unsustainable, with calls growing for better welfare protection. A ‘second wave’ of coronavirus cases has hit the economy hard, while skills shortages mean Hong Kong is the third most difficult place in the world to find good staff.
Doubts now surround the once-rock solid region. Further uncertainty should be expected the closer it gets to 2047 – when the ‘one country, two systems’ arrangement struck by the UK on handover expires.