Policy Advocacy

Research Summary

This study aims to explore the perceptions of the international business community regarding the overall business environment in Hong Kong and the implications of the National Security Law framework. This report integrates results from street surveys targeting expatriates in Hong Kong, along with insights from in-depth interviews with representatives of foreign chambers of commerce. We hope that this research will provide policymakers and relevant stakeholders with practical information to collaboratively foster a more favorable business atmosphere for the international business community in Hong Kong in the post-pandemic era and today's global context.

Key Findings

• Economic Resilience: Despite facing various challenges in the past, Hong Kong's economic foundation remains robust, demonstrating its resilience.
• Level of Confidence: Respondents exhibited a moderate level of confidence regarding the business environment over the next five years, maintaining a cautiously optimistic attitude; younger respondents showed higher confidence in their employment prospects in Hong Kong.
• Concerns about Business Practices: About 40% of respondents indicated that companies had conducted layoffs or scaled down operations, with 22.90% observing the migration of key personnel or functions (entire departments). A small number mentioned capital transfers (6.59%) or office relocations (9.56%). Notably, 38.71% of respondents stated that these practices did not apply to their companies, indicating a considerable number of businesses' stability in Hong Kong.
• Perception of National Security Legislation: The survey results reflected a generally negative view regarding the implementation of national security legislation, with 46.03% of respondents believing that the law adversely affects the international business community. Respondents noted changes in their behaviors after the legislation, such as avoiding discussions about current events.
• Familiarity with National Security Legislation: 37.07% of respondents reported being unfamiliar with Hong Kong's national security legislation, while familiarity with related laws in their home countries was significantly higher (64.47%). Younger respondents had the lowest familiarity with Hong Kong legislation, and those who understood it better often came from legal or related professional fields.
• Cognitive Gap: The study indicated a disconnect between expatriates and their overseas networks concerning affairs in Hong Kong, leading them to often feel the need to counteract negative perceptions about the city.
• Media Narrative Influence: Media portrayals of Hong Kong significantly impact public perception. Past attempts by authorities to adopt a strong and rigid stance or overly positive narratives may have failed to resonate with audiences. The comprehensive findings suggest that effective communication should not rely solely on rebuttals but also involve deeper reflection from the critics' perspective.
• Limited Singular Policies: The survey did not yield clear and consistent patterns of change among respondents based on factors like nationality, age, and duration of stay in Hong Kong. Consequently, developing targeted policies for different groups may face substantial challenges in effectiveness.

Key Recommendations

• Build Communication Bridges:
  • Promote positive messaging to downplay negative news.
  • Reduce rebuttals, increase inclusivity, and incorporate timely humor.
  • Treat the local community well to enhance their sense of belonging.
  • Establish a foreign inquiry hotline to address external concerns.
  • Appoint positive image spokespersons and normalize news releases.
• Create a Favorable Business Environment:
  • Expand cross-border access: Relax the access permit system for non-Chinese residents of Hong Kong and Macau to facilitate expatriates in traveling or doing business in mainland China, attracting and retaining foreign talent.
  • Promotion in cultural domains: Enhance cooperation in the creative industries and education, effectively utilizing Hong Kong's cultural resources to appeal to foreign businesses with cultural diversity.
  • Support SMEs: Formulate specific measures targeted at small and medium-sized foreign enterprises to help them integrate into the Hong Kong and Greater Bay Area markets.
  • Engage with external stakeholders: The Hong Kong government should strengthen direct communication with foreign business representatives and adjust policies based on actual feedback to create a more favorable business environment.
  • Proactive investment strategies: Authorities should adopt a humble yet proactive approach in engaging with emerging markets to deepen their understanding of emerging market economic structures.
  • Fully leverage the potential of the Greater Bay Area: Position Hong Kong as a business information hub, reinforcing its role as a regional economic center, providing operational insights within the region, and helping the international business community seize opportunities in the Greater Bay Area.

Conclusion

We hope the findings and recommendations from this research can contribute to creating a stronger business environment in Hong Kong, thereby sustainably enhancing its attractiveness, resilience, and competitiveness as a global financial and trading center to meet the rapidly changing world.

Read the full report here: PoD- Knowledge, Attitudes and Behaviours of the International Business Community towards Doing Business in Hong Kong.pdf