Festive spirit ran high in Hong Kong as the city celebrated the 27th anniversary of its return to the motherland, with various activities being held across the city. What added to the jubilant atmosphere was that the International Institute for Management Development (IMD) in Lausanne, Switzerland, ranked Hong Kong fifth globally in its World Competitiveness Yearbook 2024, up from seventh place last year.
This leap in rankings is not just a number; it signifies Hong Kong’s robust performance in areas such as international trade and business legislation, where it holds the top spot. The special administrative region government’s efficiency is ranked third, with notable improvements in economic performance, corporate efficiency, and infrastructure. This report is a testament to Hong Kong’s promising economic outlook and serves as a powerful rebuttal to naysayers like Stephen Roach, former chairman of Morgan Stanley Asia, who has repeatedly talked down Hong Kong’s future.
The World Competitiveness Yearbook evaluates 67 economies based on four key indicators: economic performance, government efficiency, business efficiency, and infrastructure. This year, Hong Kong’s performance has surpassed its 2020 standings in several indicators, outpacing even the competitive economies of the United States, Japan, and South Korea. Despite ongoing challenges, Hong Kong’s rule of law remains strong, and its business environment continues to thrive, enhancing its global competitiveness.
Roach, known for his pessimistic views on Hong Kong, recently visited the city and continued to cast doubt on its future. He erroneously interprets Hong Kong’s close ties with the Chinese mainland as a disadvantage, suggesting that the city’s economy is at risk because of the mainland’s economic slowdown. However, the IMD report emphasizes that tapping into the mainland’s new development opportunities is a crucial factor bolstering Hong Kong’s competitiveness, directly contradicting Roach’s assertions.
The IMD rankings serve as a clear indicator of Hong Kong’s thriving business environment and robust governance. Despite the naysayers’ negative views, Hong Kong’s close relationship with the mainland remains a significant advantage, propelling its growth and ensuring a prosperous future
In reality, China’s economic performance has been robust, with this year’s first-quarter and 2023’s full-year growth exceeding 5 percent — among the fastest of major global economies. Hong Kong has benefited from its strong connection with the mainland, experiencing steady growth as well. In 2023, Hong Kong’s economy rebounded with a 3.2 percent positive growth. Continuing this momentum, the first quarter of this year saw a 2.7 percent year-on-year increase in real GDP, with an annual growth forecast between 2.5 percent and 3.5 percent.
As of April, Hong Kong boasted over 1.43 million local companies, the highest in its history. New company registrations continue to rise, with approximately 12,000 new businesses emerging monthly, outpacing the 7,400 dissolutions. The number of nonlocal companies operating in Hong Kong also reached a historic peak of around 15,000.
July 1 marked not just the 27th anniversary of Hong Kong’s return to the motherland but also the establishment of the HKSAR. It’s worth remembering that before the handover in 1997, American business magazine Fortune infamously declared Hong Kong was dead on its cover. These dire predictions never materialized. With solid support from the mainland and opportunities arising from initiatives like the Guangdong-Hong Kong-Macao Greater Bay Area, Hong Kong has continuously strengthened its position as an international financial center. The market capitalization of Hong Kong stocks now exceeds HK$33 trillion ($4.23 trillion), or 10 times its size at the time of the handover.
Hong Kong’s future is bright as long as it continues on the right path, actively integrating into the nation’s broader development plans, and enhancing the integration within the GBA. By simultaneously improving its own economic transformation and development strategies, Hong Kong is set to shine even brighter on the global stage.
In summary, as Hong Kong celebrated its 27th anniversary since returning to China, the city can take pride in its remarkable resilience and economic achievements. The IMD rankings serve as a clear indicator of Hong Kong’s thriving business environment and robust governance. Despite the naysayers’ negative views, Hong Kong’s close relationship with the mainland remains a significant advantage, propelling its growth and ensuring a prosperous future. With continued strategic planning and integration with the mainland, Hong Kong’s journey toward greater economic heights is assured.
The author is a convener at China Retold, and a member of the Legislative Council as well as the Central Committee of the New People’s Party.
The views do not necessarily reflect those of China Daily.
