Earlier this year, Team Sweden asked members of the Swedish Chamber of Commerce in Hong Kong what they think about the business climate in Hong Kong. The report was launched during an event at Nordic Innovation House on 2 July.
Below is a summary of their opinions compiled by Anna Zhan, a consultant at Business Sweden, and Simona Rosi, International Trade Scholar at SwedCham.
Swedish companies have a strong presence in Hong Kong. They vary in size and the number of years in the market. They cover a multitude of sectors, including the financial sector, creative industries, and retail. Many of them have done very well for many years and greatly contributed to Hong Kong’s successful economic development. Many of them – 58 percent of the companies who received the survey – have provided input to this report.
The purpose of this survey is to increase the understanding of opportunities and challenges that the Hong Kong market presents for Swedish companies. The previous Team Sweden Business Climate Survey for Hong Kong was published in September 2020. Since then, the Covid-19 pandemic has continued to impact Hong Kong and the rest of the world. After a period of recession and economic contraction, Hong Kong’s economy is predicted to return to growth this year.
Hong Kong has also seen further significant political developments since the latest survey, including the continued implementation of the National Security Law introduced in the summer of 2020 and the adoption in the spring of 2021 of changes to the election system.
This year’s survey gives us several important indications of the current business climate, as perceived by companies. A majority of the responding companies remained profitable in 2020. Most have a more positive economic outlook today than a year ago, expecting increased turnover and unchanged or slightly increased investments during the coming year.
The main advantages mentioned by companies in this year’s survey when it comes to doing business in Hong Kong are the taxation system, its legal and regulatory systems, and its geographical location. Personal safety ranks highest among favorable business conditions. The “Swedish brand” contributes positively to most companies’ work, signaling quality and sustainability.
However, concerns and challenges highlighted in the 2020 survey remain in place also today. With regard to government measures to combat Covid-19, more companies considered them as adequate than inadequate. Naturally, the measures had an impact on most companies, especially those related to travel restrictions and closed borders. In terms of planning for the future, travel possibilities stand out as a key factor. High costs of rent and property have been a concern for companies for many years and are again high on the list of challenges in this year’s survey.
Concerns also remain regarding political developments in Hong Kong, including the implementation of the National Security Law, and their impact on the overall business climate in the city. The main areas of concern for companies in this regard are Hong Kong’s status as an international business center, freedom of speech, and the independence of the judicial system. A majority of the companies see a negative impact on the overall business climate in Hong Kong as a result of these developments.
The survey indicates that many companies see significant challenges – but also potential – in the field of environmental sustainability in Hong Kong. Several respondents point to a need for more knowledge and awareness about the subject, as well as further government action. As the Hong Kong government works towards the goal of carbon neutrality by 2050, interesting business opportunities will most likely present themselves to companies with experience and know-how in green solutions. Swedish companies stand ready to contribute to this work
Read the full report here.