The 2024 AmCham Business Sentiment Survey – conducted between November 16 and December 29, 2023 – is an annual exercise to gauge views of senior corporate members on wide-ranging topics covering Hong Kong’s business outlook, business environment, legal considerations, US-China relations, human resources, the Greater Bay Area, and other sector-specific topics.
The survey, following a revamp in survey content, format, and targeting of respondents, was sent to the top representatives of 522 corporates. It reflects the views of 136 corporate members with a response rate of 25%. The report serves as a useful reference for companies and executives to navigate the changing business landscape regionally and globally.
As one of the top 3 business challenges, US-China relations was seen by 56% of the respondents as likely to remain the same in the next 12 months, while 22% believe they will improve and 21% think they will deteriorate. Almost all companies (97%) think that a positive bilateral relationship is important to their businesses in Hong Kong and China.
When asked about the impact of US policies restricting American business investments in China, 50% believe there is a global business impact overall, 29% say it has caused a pause to future investments in China, and 23% will reconsider their long-term China business operations.
This Survey shows that, one year after Hong Kong reopened post-Covid, members were adjusting to the new environment and business performances. 96% assessed the business in the past 12 months to be fair-to-excellent. In fact, 81% recorded the same or an increase in revenue in 2023 compared to 2022. 76% of respondents regarded Hong Kong as a competitive international business hub in Asia – owing to the city’s international connectivity, free flow of capital, low and simple tax system, legal & regulatory system, free flow of information/data, gateway in and out of China, as well as infrastructure & transportation links.
Companies feel that foreign businesses are still welcomed in Hong Kong, and 68% view the Hong Kong Government as effective in responding to business concerns and opportunities.
More companies are confident in Hong Kong’s rule of law than previous years. 69% say that their companies’ operations have not been negatively impacted by the National Security Law. For those who are negatively impacted, 65% say they are indirectly impacted. This finding is more or less the same as in 2023.
A majority (78%) have no plans to move their regional headquarters away from Hong Kong in the next 3 years, but the business seniority of many respondents is shrinking, as the Survey reveals an increasing trend of members’ offices in Hong Kong repurposing from regional headquarters to local offices.
However, the cost of living (including housing), cost of doing business, and talent availability are top business factors that make Hong Kong less competitive vis-à-vis its regional peers.
41% of respondents say that the availability of qualified staff in Hong Kong has decreased in the past year. Companies continue to face human resources challenges such as a decreasing talent pool, rising salary and wage expenses, and difficulty hiring and retaining local talent.
Despite the government’s commitment in supporting industry, Hong Kong’s regional competitiveness in financial services is a mixed picture, due to various reasons: the slowdown of capital market activities in Hong Kong, the geopolitical tensions between US and China, limited regulatory governance framework on virtual assets.
Also, despite the many opportunities, companies are hesitant about expanding their operation to the Greater Bay Area (GBA) due to policy & regulatory uncertainty and a lack of policy coordination between GBA governments, as well as local competition.
For the full survey report: please click here.