“Failed in London, try in Hong Kong” signify “Hong Kong” as a place to escape or plan B for anyone with career crisis. Added to the view is the image of China by the Shanghaiese (the equivalent of New Yorker of US): Hong Kong as a discount seeking place during the Chinese New Year. Commercially or culturally speaking, Hong Kong is not taken as any center of the universe by anyone, even back in the colonial time or back into any emperor that ruled China. In viewing Hong Kong, we should not isolate Hong Kong alone but to put its peripheral into consideration.
Hong Kong as the place for new year discount
Service driven economy
Looking at Hong Kong’s economic structure, its GDP is generated mainly (84%) via the activities of the services sector. Similar to London, the financial hub of the world, HK generated 15% of its GDP from financial services, the biggest growth among the major sectors of the economy, followed by ownership of premises and Import and Export trade services. The Shanghaieses were right that they did contribute a lot to the Hong Kong tourism by growing its wholesale & retail and accommodation & food services. Actually, when you look at the figures of the two industries, you realized that 50% of the contribution came from the accommodation & food services, the hidden cost came with the bargain.
Financing and Insurance grew most
IT and Logistics center
A few years ago, the government vowed to develop Hong Kong as the IT and logistics center: see the result: Transportation storage, postal and courier came at negative growth whereas IT grew marginally 4 billion HKD( equiv approx. 0.5 billion USD) in the 5-year period. I’d rather not to put faith in proven failure.
Import and Export Services
Look at the import and export services industry, the growth of the industry resumed after 2009. What we are seeing the greater role of Hong Kong is to be the sourcing hub for merchandise delivered directly to the ports in China. Reason is that Hong Kong can support the trade related financing using its low rates advantage due to its dollar-pegged currency. Ports in Shenzhen, Guangdong could be an excellent destination for off-loading goods to China. Given Hong Kong’s location as a less sensitive location for importing high-end tech products, its strong legal protection for property rights can easily be enforced i.e. rep office of high tech firm can leverage Hong Kong as the site to co-ordinate its inventory and goods into China. How can the high tech gadgets be transported? Container shipping firm, (rather than dry bulker or oil tanker) with a strong focus in the Pearl River would be advantageous.
The future of Hong Kong: Failed in Hong Kong, try Pearl River.
Note: I’d try not to consider Property market into my analysis as the market is too volatile to be understood. I’d rather save it for a dedicated analysis later on.
