‘Worse than 2021’ German business confidence in HK at record low
The average score for business confidence was at 2.30.
The German community’s business confidence in Hong Kong was at an all-time low, with an average score of 2.30.
This is lower than the previous score of 2.80 recorded in June 2021, according to a survey conducted by the German Industry and Commerce (GIC) and German Chamber of Commerce (GCC). For this poll, 1 is the lowest confidence whilst a score of 5 is the highest confidence level.
This score was dragged down by the following factors: attraction to overseas talent, regional headquarters location, and political climate.
For the attraction of overseas talent in 2022, 92% of respondents said it is worse than 2021, 5% said it is the same, and 2% said it is better.
Meanwhile, on becoming an area for establishing regional headquarters, 77% said it is worse, 20% said it stayed the same, and 5% said it is better.
On political climate, 72% said it is worse, 20% said it is the same, 6% said they are not sure, and 2% said it is better.
When asked about partial or full relocation out of Hong Kong in the next 12 months 66% said they are not sure, 27% of respondents said they are eyeing partial relocation, 6% said they are seeing full relocation.
For those who responded that they will relocate, 50% picked Singapore, 28% said they will move to China, 25% will move to Thailand, and 25% said they will go back to Germany.
The survey received 109 responses between May and June 2022.
“The lowest number of registered answers for any of the questions included in this summary report was 93 (with the exception of specific follow-up questions on companies’ relocation plans),” read the GIC and GCC report.
Respondents are corporate members of the German Chamber in Hong Kong (89%) as well as non-members (11%), local subsidiaries or branches of German parent companies, sales agents and distributors of German brands, as well as locally established entities under German ownership.
According to the report, respondents are concerned over brain drain, which impacts the future of Hong Kong as a business hub. They also urged the government to allow quarantine-free travel immediately.