Macroscope | Will the coronavirus prompt a shift away from property investment and increase Hong Kong’s herd of unicorns?
- The pandemic is forcing Hong Kong to reckon with its economic future. As returns on real estate investment decline, technology entrepreneurs might see a capital inflow
- Positive perceptions of the city’s handling of the crisis could also attract global tech firms
But the next task is to accelerate the shift towards a different economic model: one that is higher up the value chain, more diverse and more resilient to shocks like the coronavirus.
There is a chance that some of the consequences of Covid-19 could actually help to make this happen – but lasting change will depend on action by policymakers, investors and business leaders.
The traditional strengths of Hong Kong’s economy in finance, hospitality and retail remain critically important. This city’s position as a leading international finance, trade and tourism hub is a core advantage. But our economic model needs to evolve if it is to deliver sustainable and growing prosperity for the community as a whole over the long term.
The government’s relief measures address the immediate and acute problems caused by the virus, but they won’t help to resolve long-term, structural economic issues. Among other changes, that will involve developing a local technology industry and encouraging re-industrialisation through advanced manufacturing.
