In this article, we examine the future of Hong Kong and future prospects, ranging from its current global rankings to its plans for 2030 and beyond, and explore what that means for expats.
Hong Kong boasts a rich history. Its strategic location and deep coastal waters have helped it to grow from a humble fishing port into a global economic powerhouse. In 1841, the region’s first census recorded a population of just over 7,500.1 Today, Hong Kong has grown into a thriving metropolis of almost 7.4 million people.
No stranger to change, Hong Kong is known for its adaptability, enabling it to remain relevant and competitive in our fast-changing world. Between the 1950 and 1970s, Hong Kong fed the growing demand for low-cost manufacturing and exports, but by the end of the 20th century had successfully made a tough transition to a service-led economy – with services now accounting for more than 92% of GDP.2
Hong Kong is now perhaps best known for financial services – currently ranking third in the Global Financial Centres Index3 and first in Asia – while offering a wide range of attractive opportunities for expat workers, with Forbes naming it the sixth best place to do business.
Hong Kong’s global rankings
- 3rd in the Global Financial Centres Index
- 5th for foreign direct investment
- 5th largest container port by volume
- 8th biggest tourism industry
- 8th largest airport by passenger volume
- 16th highest income per capita, according to World Bank
Global Financial Centres Index – March 20185
- New York City
- Hong Kong
Investing in its future
Hong Kong has a long history of strategic planning, revisiting its development policies every decade. The latest review – ‘Hong Kong 2030+: Towards a Planning Vision and Strategy Transcending 2030’ (HK2030+)6 – sets out three distinct ways that it intends to respond to current and future trends:
- Plan for a liveable, high-density city
- Embrace new economic challenges and opportunities
- Create capacity for sustainable growth
Using these three building blocks, Hong Kong plans to transition once again, this time into a regional mega-city with greater capacity for growth and the ability to host its burgeoning population in a more sustainable way.
The strategy includes plans that will make living and working in Hong Kong even more appealing for both locals and expats.
Good news for Hong Kong visitors
Hong Kong is future-proofing its international airport as part of investment work taking place over the next few years – a move that is expected to benefit both travellers and businesses.7
- £123bn will be invested to construct a three-runway system by 20248
- Expansion of the airport will accommodate 102 million passengers, 8.9 million tonnes of cargo and 607,000 aircraft movements annually by 2030
An incubator for innovation
As surrounding economies continue to grow in both size and sophistication, Hong Kong faces stiff competition to retain its position as a leader on the Global Innovation Index. The HK2030+ proposals6 address this directly, with ambitious plans to “move Hong Kong up the value chain” and make it a leader in talent, research and development.
In addition to major investments in education9 and plans to develop a giant innovation andtechnology park,10 Carrie Lam, who is head of the Government of Hong Kong as the Chief Executive of the Hong Kong Special Administrative Region, has confirmed her intention to introduce greater tax incentives11 for Hong Kong businesses undertaking research and development (R&D) work. These companies will receive a 300% tax deduction for the first HK$2m they spend on research and development for their Hong Kong business for the first year. The scheme is particularly aimed at helping small businesses to develop.
As the leading financial centre in Asia, the current FinTech revolution is something that Hong Kong is especially keen to benefit from. Hong Kong has quadrupled its investment in FinTech12 over the past two years and now hosts 48 of the top 100 FinTech companies in the world.13
Companies who continue to invest in the Fintech industry will receive support from the Hong Kong government, which will result in continued growth and increased opportunities for expats. Making this an exciting time for expats who work within the financial and tech sectors in Hong Kong.
Hong Kong FinTech investment
Hong Kong is the fourth most densely populated place in the world,14featuring a skyline full of iconic high-rise buildings. With finite space to work with, and high property prices15, Hong Kong is always looking for ways to accommodate its growing population and introduce greater capacity for growth.
It is currently scaling up its land reclamation efforts,16in order to create new buildable land in the surrounding waters. Projects include creating space for hundreds of thousands of new homes.17
Hong Kong is also integral to China’s mammoth ‘Belt and Road’18initiative – an ambitious US$900bn project intended to “reinvigorate the seamless flow of capital, goods and services between Asia and the rest of the world”. Included in the plans are major infrastructure and transport improvements in and around Hong Kong,19which should shorten commutes for expat workers and make it easier to access and do business with the rest of the globe.
What is the Belt and Road initiative?
- Creates new land and maritime links between China and surrounding regions
- Intends to connect 65 countries across Asia, Africa and Europe
- Will link more than half the world’s population
- New and more efficient trade routes
- Integrated multinational transport network
- Estimated US$900bn allocated to current and future projects
Boosting health and wellbeing
Hong Kong recognises the impact 20 that a high-density population can have on wellbeing and the quality of life of residents, and has major plans to make its compact environment an even greener, healthier and happier place to live.
These include improving public transport, pedestrian and cycle networks; reinventing public spaces, such as parks, to enhance accessibility and enjoyment; and investing in a range of public facilities, including schools and public health services.
Top green spaces
- Hong Kong Park – central location, designed to provide a beautiful environment for both educational and leisure purposes.
- Kowloon Park – full of amenities, including a maze, swimming pool, sports centre, Chinese garden and its renowned bird lake.
- Victoria Park – largest park on Hong Kong island, hosts to major events including the Flower Market before Chinese New Year and the Mid-Autumn Festival lantern carnivals.
Economic growth and resilience
With a healthy growth rate of 3.8%21 and major long-term investments planned across all key areas, including an HK$18bn investment in Hong Kong’s innovation and technology ecosystem,22 plus continued investment in education and infrastructure projects,9 Hong Kong’s economic future looks positive.
Coupled with ambitious health and wellbeing and environmental improvements and a buzzing metropolis, these are exciting times ahead for the burgeoning city and its residents. As it keeps pace with an expanding world, Hong Kong looks set to remain a top choice for expats hoping to work in the region for some time to come.
Read more about what Hong Kong has to offer expats here
The information provided in this article is designed as a guide to what you might expect in Hong Kong and is correct at the date of publishing. Please check any information with local Hong Kong authorities to make sure the information is still valid.
William Russell is a trading name of William Russell Ltd, which is authorised and regulated in the UK by the Financial Conduct Authority, and William Russell Europe SRL, which is registered in Belgium with the Financial Services & Markets Authority. We provide insurance plans on behalf of AWP Health & Life SA, an Allianz group company registered in France, and AWP P&C SA UK, an Allianz group company registered in the UK. We’re here to help our customers, but we don’t offer insurance advice.