Small and medium-sized enterprises in Hong Kong are seeing glimmers of hope as the boundary with the Chinese mainland has reopened and anti-pandemic measures have relaxed, according to a survey released on Tuesday.
The Standard Chartered Hong Kong SME Leading Business Index rebounded 2.5 points to 46.7 for the first quarter of 2023, with increases in four of the five subindexes.
While the subindexes of Recruitment Sentiment and Investment Sentiment rose 0.5 points and 1.4 points respectively to go above the neutral level of 50, the Global Economy subindex saw the biggest advance of 14.4 points quarter-on-quarter. Business Condition increased by 3.2 points.
The gradual boundary reopening between Hong Kong and the mainland and a swift recovery of the mainland (beyond the short-term pain of more pandemic disruptions) helped boost the indices.
Kelvin Lau Kin-hang, Standard Chartered Hong Kong’s senior economist for Greater China
“The gradual boundary reopening between Hong Kong and the mainland and a swift recovery of the mainland (beyond the short-term pain of more pandemic disruptions) helped boost the indices,” said Kelvin Lau Kin-hang, Standard Chartered Hong Kong’s senior economist for Greater China.
“With the accelerated local and global recovery, the market atmosphere and business environment will continue to pick up this year,” Lau said.
He said there would be a more pronounced rebound after the peak of the pandemic in the mainland, with the index promising to return to above 50 by the second half of the year.
ALSO READ: Record jump of 11.4 points for HK SME business confidence
Sponsored by Standard Chartered Hong Kong, the SME Leading Business Index is a forward-looking survey on local SMEs’ outlook on the overall business environment for the next quarter. A reading above 50 indicates optimistic business sentiment among SMEs, while anything below 50 indicates a pessimistic outlook.
The Hong Kong Productivity Council interviewed 822 local SMEs in the first half of December 2022, spanning the manufacturing, import and export trade and wholesale, retail, accommodation and catering services, information and communications, finance and insurance, professional and business services, real estate and construction industries.
“The fieldwork period of this quarter’s survey coincided with the government’s relaxation of pandemic measures and inbound travel control arrangements, and such expected upturn was well-reflected in the index results,” said Edmond Lai Shiao-bun, chief digital officer of HKPC.
READ MORE: HK's financial market ready to take big leap in Year of Rabbit
“With the commencement of the boundary reopening, the flow of people between Hong Kong and the Chinese mainland will gradually increase, which will in turn help boost the recovery of the Hong Kong economy,” he added.
Contact the writer at suzihan@chinadailyhk.com