Hong Kong General Chamber of Commerce: Nearly half of the surveyed companies have a positive outlook on Hong Kong's economy in the next 12 months.

Recently, the Hong Kong General Chamber of Commerce released the results of a survey on business prospects. 48.3% of the surveyed companies expressed a positive outlook on Hong Kong's economy in the next 12 months, a significant increase from 18.3% last year. Only 15.3% of companies surveyed had a pessimistic view of the outlook for 2026, a decrease from 44.3% last year. Chairperson of the Hong Kong General Chamber of Commerce, Shirley Yuen, stated that the temporary halt on tariff increases between China and the United States, along with progress in the Israel-Palestine peace talks, may have influenced this year's survey results, leading to a significant increase in business confidence compared to last year. However, increased confidence does not necessarily mean that it is already reflected at present due to existing uncertainties. As an export-oriented economy, Hong Kong's actual investment by companies is still subject to global changes. Economist of the Hong Kong General Chamber of Commerce, Gloria Fung, mentioned that the rate cuts by the Federal Reserve benefit the Hong Kong property market, but there are differing opinions on future rate cuts, necessitating observation. It is hoped that the Hong Kong stock market and IPOs can continue to thrive, the year-long trade truce between China and the U.S. will help reduce external trade uncertainties, and the high demand for AI-related electronic components, as most of Hong Kong's exports are electronic products, will benefit Hong Kong's exports and economy in the short term. However, considering the stable global economic recovery, continuing tariff impacts, potential variables in U.S. trade policy, as well as uncertainties such as chip shortages and price hikes, it is expected that exports will significantly slow down next year. Fung also pointed out that retail sales in Hong Kong have been increasing in recent months, but there are doubts about whether this momentum can be maintained into next year. The application of AI may temporarily increase unemployment rates, as it may replace existing job positions, especially at the junior level, so the unemployment rate is expected to remain around 4% for a longer period, which may affect retail sales and result in more cautious consumption, thus it is expected that retail sales growth in Hong Kong next year will be relatively stable. The survey showed that over 70% of the surveyed companies indicated an increase or roughly unchanged turnover in the first 10 months of this year compared to last year, with 41.5% maintaining roughly unchanged turnover. 40.3% of companies expect business performance to improve next year, 44.1% expect business to remain stable, and only 15.7% believe that turnover will decrease. Most companies surveyed are taking a wait-and-see approach to their capital investment plans in Hong Kong, with 65.7% expecting the investment level in 2026 to remain unchanged. However, they are more optimistic about external investments for risk diversification and exploring new opportunities. Apart from Hong Kong, the Greater Bay Area continues to be a popular investment destination, with 38.7% of companies with operations in the area planning to increase investment in the next 12 months, while only 3.7% plan to reduce their investment level in the Greater Bay Area. Furthermore, there is increasing interest among companies in diversifying their investments in emerging markets, especially in Southeast Asia, with approximately 41.1% and 26.2% of companies planning to increase their investments in ASEAN and the Middle East markets in the next 12 months. As AI becomes increasingly important, the survey shows that although over 90% of companies are actively incorporating AI and other digital technologies into their operations, most are still in the intermediate or preliminary stages. However, the digital transformation progress of small and medium-sized enterprises is slower, with 14% of SMEs surveyed not using any related technologies, compared to only 2% of large enterprises. Among those who have already adopted AI or digital technologies, 75.5% believe that the most significant benefit is improved operational efficiency. Other advantages include reducing operational costs, decreasing human errors through automation, and enhancing product or service quality. However, 53.8% of respondents identified a lack of tech talent as the main obstacle to digital transformation in businesses, coupled with high initial investment costs, companies expect a slow progress in the short term for digital transformation, with only 24.3% having an optimistic outlook on significant progress and completion of digital transformation. As the application of AI and digital technologies becomes increasingly widespread, the survey shows that some companies may consider restructuring their workforce. In terms of recruitment intentions, 22.5% of surveyed companies plan to increase their workforce, while 55.9% plan to maintain their workforce levels in 2026. President of the Hong Kong General Chamber of Commerce, George Leung, stated that large enterprises are more likely to adopt AI and digital technology to a greater extent than small and medium-sized enterprises, with the overall proportion higher than last year. As companies are still in the learning stage in applying AI, if they do not achieve significant results, there may be doubts about resource allocation.