Outside In | Still too soon for Hong Kong to declare its economy out of the woods

The economic schizophrenia in Hong Kong was clearly displayed in this newspaper’s business section last Wednesday. The leading news (“City gets HK$38.3bn boost in first half”) was of more than 300 companies investing in Hong Kong and creating 3,500 jobs. Alongside this was a report (“PwC cuts fundraising forecast for HK by 20%”) on a sharp fall in expectations for Hong Kong’s initial public offering market. So – good news or bad?

After five terrible years in which civil unrest and pandemic restrictions produced a recession, miserable stock market, stagnant property market, migration and sharp fall in many global rankings, there has at last been some genuinely good news.

Hong Kong has been promoted back to fifth place in the IMD World Competitiveness Ranking, which also hoisted the city’s economic performance from an ignominious 36th to 11th. Cathay Pacific Airways, Hong Kong’s flagship carrier, has also clawed back to fifth place in Skytrax’s ranking of global airlines, and jumped from ninth place to third in AirlineRatings’ ranking of premium airlines.

For an administration that craves good news to contradict the naysayers seeking to write off Hong Kong as one of the world’s most competitive economies, this evidence of “green shoots” has brought comfort. The mood has been buoyed by the reminder that no one over the past four decades has bet against Hong Kong and won.

For an economy used to the swagger that goes with ranking among the top-performing economies worldwide, it has been humbling and bruising to tumble so sharply out of favour, to be told we have been overtaken by economies that Hong Kong can still out-compete.