Executive Search in Hong Kong– 2016 Outlook
Demographics, China slowdown hurting economy
Being one of China’s largest trading partners and key destination for Chinese tourists, Hong Kong’s economy is highly dependent on China. The softening Chinese economy and a decrease in Chinese tourist arrivals is expected to adversely affect Hong Kong in 2016.
Hong Kong GDP growth is expected in the range of 1.9% to 2.7% as predicted by The Economist and IMF respectively.
Inflation, meanwhile, is expected to stabilize at between 2.6% and 3%, also as estimated by The Economist and IMF respectively
Demographic pressures are increasing as 1 in 6 people in Hong Kong is over 65 years old and net migration is outward. Efforts have been taken by the government to attract talent from both China and the world to fill the gaps. Hong Kong’s affluent and aging population generates attractive business opportunities as GDP per capita is expected to exceed US$43,000 (The Economist).
Export and import trade makes up 20% of Hong Kong’s GDP. Slower Chinese and global demand coupled with a strong currency pegged to the US Dollar is expected to adversely affect the trading sector in 2016.
Retail, luxury and travel-related sectors are affected by the lower mainland Chinese travelers and competition from cheaper destinations such as Europe and Japan. Christmas sales in 2015 reportedly declined 30% and indicated the weakening position flagged by UBS that this may increase unemployment in the retail sector
Organizational streamlining undertaken by top banking and financial companies over the next 2-3 years are likely to have an adverse effect on employment in that sector also.
Healthcare and Internet technology meanwhile are expected to remain stable.