American Chamber of Commerce survey finds businesses in Hong Kong pessimistic about outlook for 2021

Robbie Hu
·3-min read

Members of an influential American business group in Hong Kong are expecting a challenging 2021 – following an already-gruelling 2020 – and have called on the government to offer more clarity on how it intends to bring the coronavirus pandemic to heel and shore up stability in the coming year, according to a new poll.

More than 40 per cent of the companies surveyed by the American Chamber of Commerce in Hong Kong (AmCham) expressed pessimism about their prospects for 2021, while a third said they felt the city had become less competitive as a global business hub over the past year.

The rapid deterioration of US-China relations remained a pressing concern for the business executives surveyed, as did the ongoing pandemic and Hong Kong’s changing political and economic climate.

Get the latest insights and analysis from our Global Impact newsletter on the big stories originating in China.

The pandemic and the political climate are among the issues troubling the business community. Photo: Winson Wong
The pandemic and the political climate are among the issues troubling the business community. Photo: Winson Wong

One of the respondents, seemingly summing up the concerns of many, said: “Much will depend on getting the pandemic properly under control, to stop the ‘on again, off again’ environment. In addition, the geopolitical instability is a major threat.”

The 181 members who responded to the survey – conducted between December 11 and January 4 – represented about 15 per cent of the chamber’s membership, with about half headquartered in the United States, and around a third based in Hong Kong. No mainland Chinese companies responded to the poll.

Sixty-one per cent of respondents said they believed the city’s business environment had been unstable and deteriorated last year.

Hong Kong budget 2021-22: finance chief reserved on cash handouts

Over 60 per cent said they lacked confidence in the Hong Kong government’s handling of travel restrictions and other measures aimed at curbing the pandemic. Most said they hoped the government would increase transparency and communicate more clearly about its strategy, with better data and clearer reference to science, the survey found.

However, not all respondents foresaw doom and gloom. As one put it: “The markets have been stable and business activity has increased. Capital flows into [Hong Kong] and China have remained very healthy. Ill-informed criticism from Western politicians and media were inaccurate and unhelpful.”

Financial Secretary Paul Chan has remained reluctant to offer more cash handouts amid the coronavirus pandemic. Photo: Nora Tam
Financial Secretary Paul Chan has remained reluctant to offer more cash handouts amid the coronavirus pandemic. Photo: Nora Tam

Still, the largely negative results came as the city’s financial chief, Paul Chan Mo-po, continued to express reluctance over offering fresh cash handouts, arguing the city needed sufficient reserves to deal with unforeseeable events.

Chan told a radio programme on Saturday that Hong Kong’s economy had shrunk 3.2 per cent in the first three quarters of 2020, marking the first time the city had recorded two annual economic contractions back to back. Amid 2019’s prolonged anti-government protest movement, the city’s economy shrank 1.2 per cent.

This article American Chamber of Commerce survey finds businesses in Hong Kong pessimistic about outlook for 2021 first appeared on South China Morning Post

For the latest news from the South China Morning Post download our mobile app. Copyright 2021.