Hong Kong’s employment market continues to improve, and the latest unemployment rate from July to September has declined 0.2 percentage points from the previous period to just 4.5%. This is the lowest unemployment rate in the last one and a half years. Moreover, since the beginning of 2021, unemployment has already dropped by almost 3%. Nonetheless, the decreasing momentum of the rate has been slowing down in recent months, indicating a weakened driving force of Hong Kong’s economic recovery.
Young worst hit
Despite the overall drop in unemployment, those aged 15 to 24 have been hardest hit. Although the youth unemployment rate, in this age band, has receded from over 20% in 2020 and still stays at the level of 15%, which is much higher than the overall level. Paul Chan Mo-po GBM GBS MH JP, Financial Secretary, Hong Kong, recently attended a seminar at the Hong Kong Metropolitan University to engage with students about their views on Hong Kong’s prospect and their own career aspirations.
Despite continuous economic development, Hong Kong’s pattern of industries and employment has led to an unbalanced economic structure. Over the past two decades, the financial service sector has taken up a much more important proportion in Hong Kong’s GDP, which has surged from 12.8% to 21%. However, its contribution to the share of employment only grew from 5.3% to 7.1%, accounting for about 270,000 employed persons. For the trade and logistics sector, the portion it took up of the GDP has dropped from 23.6% to less than 20% over the same period, and its share of the job market declined from 23.8% to 17.5%, but still employing over 670,000 people. For the tourism sector, although it only accounted for 4.5% of our GDP just before the outbreak of the pandemic, it employed 6.6% of our workforce, i.e. just over a quarter of a million talents. Under this employment structure, even the financial services sector has enjoyed a robust development, stimulating talent demand in the retail, catering, tourism and transport sectors.
Cost of living still a thorn in HK’s side
The value of assets in different economies globally has kept surging in recent years due to the excessive free capital brought by the quantitative easing policy implemented in many western countries. However, in Hong Kong’s case, coupled with a long-time shortage of land supply, the price of accommodation has long since far exceeded the affordability of most of our citizens, who suffer an extremely high cost of living, which takes away a big slice of salaries and undermines actual purchasing power.
“Our economic structure has led to a seriously uneven distribution of the fruits of economic development and worsens the income and wealth disparity. The growth of people’s income can hardly catch up with the surge in living costs.”
Chan noted, “To a certain extent, our economic structure has led to a seriously uneven distribution of the fruits of economic development and worsens the income and wealth disparity. The growth of people’s income can hardly catch up with the surge in living costs. This has become the major dilemma of our society, which greatly undermines people’s sense of achievement and satisfaction and even their sense of belonging to the society.”
Aspirations for life in Hong Kong
Different generations may have different wishes, from a more diversified platform for career development, to a more comfortable living environment and a more caring society for the elderly. Chan put forward a solution, “If we see the development of Hong Kong as a robustly growing Banyan tree, what it needs is the participation of all of us to make it grow stronger. A stable environment is the foundation for development and prosperity, just like the roots of the tree. The ‘One Country, Two Systems’ principle has to be fully implemented, and Hong Kong needs to firmly grasp the opportunities brought by the development of our Country.” He added, “With the governance of Hong Kong being part of the national governance system, we have to fully and comprehensively understand the relations between the Constitution and the Basic Law, the national strategy and plan of economic development and rightly position ourselves. By doing so, we could better take up our roles in the development of our Country, the Guangdong-Hong Kong-Macao Greater Bay Area (GBA), and have better cooperation with other brother cities in the GBA.”
Under this Bayan tree model, traditional pillar industries, such as financial services, are akin to the tree’s main trunk—to make it stronger. The freshly grown prop roots—needed to anchor to the ground for better development—akin to Hong Kong’s emerging industries, such as innovation and technology, which are likewise needed to connect with the production factors and the Mainland China market for robust and speedy growth.
Chan said, “By leveraging the demands and opportunities of the Mainland and the GBA in particular, with our own strengths and the effort of the Government, other sectors of Hong Kong, such as professional services, real estate, catering, retail, art, cultural and performance activities would enjoy a broader space for development. This will create more jobs and opportunities for better career prospects for our citizens, especially our young people. After the implementation of the Hong Kong National Security Law and the enhancement of the electoral system, the executive-led system is back on track, and the development of Hong Kong under the new phase will be expedited to show a new landscape.”
No matter how the economic development flourishes, a critical factor is that more of the mass public can share the benefits and the fruits of economic development. The interests of the public should always be at the heart of any economic and social development, and crucial to achieving this goal are robust economic development and diversified development of industries. In doing so, the Government and employers can work collaboratively to provide more high-quality careers, a wider variety of opportunities that appeal to an increasingly diverse talent pool and boost disposable incomes to boot.
Paul Arkwright
Publisher
