An old proverb says, “All things are difficult before they are easy.” That idea could perfectly apply to the last two years in Hong Kong, which have been very challenging, first (2019) due to the social unrest, then (2020 and 2021) because of the pandemic, which, even though it has not ended, seems to be improving, at least in Hong Kong.
In that sense, Hong Kong’s economy is expected to grow by between 5.5 percent and 6.5 percent this year, compared with an earlier range of 3.5 percent to 5.5 percent, according to the revised government figures released on Aug 13, which means that the growth is considerably higher than initially expected.
The Hong Kong Special Administrative Region government also raised its year-on-year GDP figure for the second quarter to 7.6 percent from an advanced reading of 7.5 percent, signaling a continuing economic rebound brought on by the easing of the pandemic. In the first quarter of 2021, Hong Kong went from recession to its fastest economic growth in more than 10 years — a revised figure of 8 percent.
It is true, though, that the uncertain evolution of the pandemic may hinder this recovery, but the situation looks good nonetheless, much better than it looked exactly one year ago.
Furthermore, to further boost the local economy in the second half of this year, officials have recently rolled out a HK$36 billion ($4.6 billion) consumption voucher program.
Things have been complicated in Hong Kong these last two years. Since 2019, the city has faced unprecedented economic challenges. Despite Hong Kong being in great shape in 2017 and 2018, the economic situation worsened afterward, as 2019 and 2020 were two of its most challenging years socially and economically because of the monthslong social unrest and the COVID-19 pandemic.
However, it is safe to conclude that Hong Kong’s economy remains resilient despite the huge challenges, showing signs of a gradual resurrection. We can take comfort in the fact that Hong Kong went through the Asian financial crisis, the SARS outbreak, the global financial tsunami and the current pandemic without any significant outflow of capital.
The figures released by the government last month are a clear example of this gradual resurrection. Now that we are seeing these green shots, we may also wonder, what could Hong Kong do to grow even more and faster?
For starters, and to me this is a key area, Hong Kong should start gradually reopening its borders, now that the number of vaccinated people is much higher in the special administrative region.
It is time for Hong Kong to reopen its borders and introduce safe “travel bubbles” to facilitate travel between safe cities and rejuvenate the economy in the region, and also reduce further the quarantine requirements for fully vaccinated travelers from Europe, the United States and Asian countries.
Undoubtedly, the new Delta variant poses a threat due to its higher transmissibility, but, at the same time, Hong Kong cannot afford to live forever without tourism, since Hong Kong has ranked No 1 for years in the world’s most-visited-cities ranking, due to its unique combination of one of the world’s most important financial centers, its enormous touristic attractiveness, and also its unique geopolitical location as the gateway to China.
Therefore, it is vital for Hong Kong people to get vaccinated as fast as possible so things can go back to normal soon, allowing the reopening of borders safely.
Second, Hong Kong should keep up its good work when it comes to further integrating in the Guangdong-Hong Kong-Macao Greater Bay Area blueprint, thus trying to embrace as many initiatives as possible. In China’s 14th Five-Year Plan (2021-25), the central government again recognizes Hong Kong’s potential at the national level and has reaffirmed its commitment to support the HKSAR in strengthening its status as an international financial, trade and logistics hub. Hong Kong will benefit from pursuing deeper economic integration with the mainland by leveraging many initiatives while enhancing its status as one of the world’s most important financial centers.
Some of these initiatives are the Wealth Management Connect Scheme and consequently Hong Kong becoming a family office hub; the parallel development of fintech (financial technology) on the Chinese mainland and in Hong Kong; and the digital-yuan tests in Hong Kong and future deployment for cross-border transactions.
Besides, in the same way that, thanks to the Greater Bay Area, young Hong Kong people should be more open to the idea of studying, working, and starting businesses in the nine-mainland-city cluster, especially Shenzhen, more people from the mainland will also be even more attracted to move to Hong Kong in order to leverage some of the GBA-related opportunities.
To sum up, Hong Kong’s economy not only holds firm despite the huge challenges, but it shows signs of a higher and faster recovery than initially expected, which shows that Hong Kong’s post-pandemic future will not only be as bright as it was before, but even better.
The author is a fintech adviser, a researcher, and a former business analyst for a Hong Kong publicly listed company.
The views do not necessarily reflect those of China Daily.