Foreign businesses reassured by HK's stability: Confidence in rule of law and investment climate grows

A recent survey conducted by the American Chamber of Commerce in Hong Kong reveals that while 67% of respondents anticipate further deterioration in China-US relations over the next year, 83% of businesses expressed confidence in Hong Kong's rule of law. Furthermore, 79% of surveyed members stated they have no plans to relocate their headquarters out of the city in the next three years.

Hong Kong's restored stability under the National Security Law and its strong rule of law have enhanced its business environment despite rising external uncertainties. This has bolstered international confidence, with foreign enterprises continuing to view Hong Kong as one of the best places for pursuing business opportunities, generating profits, and realizing ambitions.

China-US relations remain a key concern for American businesses in Hong Kong. The US's recent trade, financial, and technology conflicts with China have inevitably impacted Hong Kong, a critical bridge between Chinese mainland and international markets. Last year, 58% of surveyed members identified China-US relations as the primary challenge for doing business. Despite these challenges, most US companies in Hong Kong still regard the city as a valuable international business hub.

This year's survey showed that 79% of respondents have no intention of relocating their headquarters from Hong Kong in the next three years, consistent with last year's 78%. Notably, the percentage of companies planning to leave decreased by 5 percentage points to just 2%. Meanwhile, 75% of respondents agreed Hong Kong remains a competitive international business center in Asia, a figure close to last year's 76%. Additionally, 90% of members felt that Hong Kong is either as welcoming to foreign investment as before or even more so, with only 9% believing the city is less welcoming—a 2% drop from last year.

Confidence in Hong Kong's rule of law has also risen, with 83% of respondents expressing trust in it, up by 4 percentage points from last year. Furthermore, 70% of companies reported no negative impact on operations from the National Security Law and Safeguarding National Security Ordinance, compared to 69% last year. These findings underscore Hong Kong's enduring appeal as an international financial and commercial hub, reflecting foreign businesses' confidence in the city's legal framework. They also serve as a strong rebuttal to claims that Hong Kong's business environment has deteriorated.

Under the "one country, two systems" principle, Hong Kong has maintained its trusted legal system, which is widely recognized and respected by the international community. This foundation solidifies the city's status as a global financial and trade center. According to the "Rule of Law Index 2024, World Justice Project," Hong Kong's ranking in East Asia and the Pacific remains sixth, and it ranks 23rd globally among 142 countries and regions—outperforming several Western nations that have criticized Hong Kong's legal system.

By strengthening its legal safeguards for national security, Hong Kong has demonstrated to the world its safer, freer, more open, and more predictable business environment. Global investors now have greater confidence in investing in Hong Kong. The city has reclaimed its title as the world's freest economy, regained third place as a global financial center, and risen two spots to fifth in global competitiveness rankings. It has also re-entered the top 10 in talent competitiveness and continues to lead in areas such as investment climate, international trade, business regulations, and air cargo volume. Recent assessments by the International Monetary Fund further affirm Hong Kong's position as an international financial hub. Additionally, the city has achieved record-high registrations of both local and foreign companies.

With the "one country, two systems" principle back on track and supported by the central government, Hong Kong is set to expand its international ties, enhance its global influence, and strengthen its role as a connector between the mainland and the world. The city's business environment, characterized by the rule of law, internationalization, and market openness, will only continue to improve. International investors, including American companies, are increasingly confident in Hong Kong's prospects, as reflected in their continued investment and participation in the city's growth and in the mainland's high-quality development opportunities.

Related News:

China unveils measures to expand financial opening up

HK can make use of 'super-connector' and 'super value-adder' to find new opportunities: Paul Chan