Hong Kong has long been considered an important business and financial center in the Asia-Pacific region. Having been awarded the title of the “world’s freest economy” for the 21st year in a row in 2015, the city remains a popular choice for both Chinese and international investors who are attracted to Hong Kong’s low
Hong Kong has long been considered an important business and financial center in the Asia-Pacific region. Having been awarded the title of the “world's freest economy” for the 21st year in a row in 2015, the city remains a popular choice for both Chinese and international investors who are attracted to Hong Kong's low tax rates and easy access to the rest of the world. The special administrative region also came in second for global foreign direct investment (FDI) according to the United Nations Conference and Development (UNCTAD) 2015 world investment report.
Hong Kong's Economic Challenges
Highly dependent on international trade, the city was correspondingly impacted by the recent global and Chinese financial crisis. Based on figures from the local census and statistics department, the external sector contracted 2.2 percent year-on-year in the first three quarters of 2015, with total exports of goods falling 3.2 percent compared to the year before in real terms in the third quarter. However, increased domestic demand boosted the local economy, resulting in a GDP year-on-year growth of 2.5 percent in the above mentioned period, which is lower than the 3.2 percent reported in 2014.
Hong Kong's service-oriented economy was also adversely affected by decreasing numbers in inbound tourism. Its strong currency rate, along with a lack in development of new and exciting tourist attractions and China's anti-corruption policies, have resulted in many mainland Chinese tourists opting to travel to countries like Japan and South Korea that have weaker currencies. As majority of their tourist volume comes from China (currently around 77 percent based on figures released by the local tourism board), this has resulted in a 3.1 percent fall in retail sales in the first 11 months of 2015.
Mature Security Market
Companies report that the overall local security market still shows positive results. “Hong Kong's security market is quite mature but there is still some positive growth,” commented Michael Ng, Regional Sales Leader for Hong Kong, Macau, and Taiwan at Honeywell Security. This growth is supported by projects that are steadily emerging from both the public and the private sector.
“We saw increasing demand from public infrastructures like airport, metro, hospital, etc., thanks to the government's effort to improve public service. Hong Kong is a mature market. Banking and commercial buildings still continuously generate demand with new projects and old system upgrades,” said Gary Deng, Product Marketing Manager (Engineered Solutions and Software) at Bosch Security & Communications Systems. “Market trends are heading toward high resolution, IP-based, and also bundled systems with PA and fire alarms.”
Many surveillance systems currently deployed in various government and transportation projects around the city, such as the ones in the mass transit railway (MTRC HK) and the Hong Kong International Airport (HKIA) are undergoing upgrades. “Upgrade of existing analog systems to IP solutions have been ongoing in recent years, and this has become a trend in the industry,” said Ng.
The upgrades can also include the incorporation of new technology to further enhance its surveillance capabilities. “Analytics for intrusion detection, stopped vehicles, radar systems for real-time camera tracking of objects, thermal cameras for nighttime and bad weather viewing conditions, to name a few, can now all be considered by the customers when replacing outdated equipment,” said Bob Ruggles, Business Development Manager of APAC at Pelco by Schneider Electric.