Hong Kong enjoys ‘competitive advantages’ over Singapore in global talent race: Paul Chan

• Finance chief Paul Chan says Hong Kong can offer attractive career development opportunities and a good place to settle down, among other perks

Hong Kong has "competitive advantages" over regional rival Singapore in the global talent race, the finance chief has said, adding such professionals will help give the property market a much-needed boost.

Financial Secretary Paul Chan Mo-po made the comparison after Hong Kong recently secured fifth place in the IMD World Competitiveness Ranking. Singapore came away with the top spot on the list.

Despite their strong overall performance among the 67 ranked economies, Hong Kong and Singapore were among the weakest in the "prices" category, coming in at 65th and 62nd, respectively.

Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team.

But Chan told the Post that Hong Kong had more to offer global talent than its regional rival.

"Given that Hong Kong is an international city, we have to acknowledge what our competitive advantages are ... we have our own attractions for international talent," he said.

The finance chief said the city offered very desirable career development opportunities for mainland Chinese talent arriving from across the border and overseas, especially as professionals in certain fields came under pressure amid recent geopolitical tensions.

Hong Kong was also better for settling down as it offered a strong education system and metropolitan lifestyle, with a range of dining and entertainment options, he added.

"When you contrast Hong Kong with Singapore, in terms of freedom, here is much better. And in terms of lifestyle, here you have mountains, you have beaches, the lifestyle is much more interesting," he said.

"In terms of the art scene, we have the Palace Museum, M+ and the annual Art Basel event, plus more than 200 Michelin-recommended restaurants, which are very attractive to talent."

Chan described Hong Kong's inflation rate, which stood at 1.7 per cent last year, as moderate and under control, while the city's high cost of living was rooted in historical issues.

He also noted that the government's various talent recruitment drives had received more than 300,000 applications since December 2022.

About 120,000 of the 190,000 approved applicants had already arrived in the city, he added.

Financial Secretary Paul Chan says many coming into Hong Kong under a top talent scheme are professionals in their forties with young families. Photo: May Tse

The minister said the influx of talent was not only expected to boost the local economy, but also "lend some support" to the property market.

Chan also brushed aside concerns about the lower property market momentum recorded in recent months.

"We are pretty confident, although the supply is sufficient, there is no oversupply situation in our property market, and the underlying demand is still strong," he said.

The finance chief also pointed to the demographics for those arriving in Hong Kong under the Top Talent Pass Scheme, saying most were professionals in their forties with young families.

"As they settle in Hong Kong, it will lend some support to the domestic residential demand ... in terms of rentals and buying their own homes," he said.

The government last November polled successful candidates who had been in the city for more than six months, finding most were living in rental properties and about 5 per cent had bought homes.

But Chan said high interest rates remained a deterrent for some potential homebuyers, especially since the rates were not expected to drop until later this year or early 2025.

"There will be certain supports for the property market. The risk of a plunge in property prices is not high, but slight fluctuations are inevitable," he said.

The government lifted all property curbs as part of measures announced in this year's budget, triggering an instant rise in home transactions and property prices.

According to data provider Dataelements, 4,141 new residential properties were sold in the primary market in March, compared with 262 in February.

The figure dropped by more than 50 per cent to 1,880 properties in April, before sliding 32 per cent to 1,273 in May.

Transactions in the secondary market also showed signs of slowing, dropping from 5,350 in March to 4,500 in April.

Analysts have said they expect the figure to drop to 3,000 for May.

Hong Kong is also a top choice for Southeast Asian and Middle Eastern businesses, which are looking to set up family offices in the city and use the place as a stepping stone into the mainland market, Chan says. Photo: Jonathan Wong

Chan also expressed confidence in Hong Kong's bid to overtake Switzerland as the world's leading wealth management centre, amid the city's race against Singapore to become the regional family office hub.

UBS CEO Sergio Ermotti earlier forecast that Hong Kong would overtake Switzerland by 2027.

While Chan declined to offer a prediction, he said: "It's inevitable that Hong Kong will overtake Switzerland in terms of wealth and asset management services.

"The Greater Bay Area, which has a population of 80 million, is a relatively richer part of [China], and its residents have a strong desire to allocate part of their assets outside the mainland, with Hong Kong coming to their help."

The finance minister said Hong Kong was also a top choice for Southeast Asian and Middle Eastern businesses, which were looking to set up family offices and use the city as a stepping stone into the mainland market.

In October 2022, Hong Kong announced it aimed to attract 200 large new family offices by 2025.

InvestHK, a government agency which supports foreign investment, said it had already helped 64 family offices to set up shop in the city, while another 130 had indicated they had plans to do so.

More Articles from SCMP

This article originally appeared on the South China Morning Post (www.scmp.com), the leading news media reporting on China and Asia.

Copyright (c) 2024. South China Morning Post Publishers Ltd. All rights reserved.