Hong Kong is considered one of the ‘Big Six’ global cities – a small group of the most globally connected and integrated cities in the world.
The city possesses ‘global fluency’, with a long history of operating as a key hub in international networks. A financial services centre, a multinational business hub, an international tourist destination, Hong Kong has a whole range of globally-recognised strengths. This is reflected in the level of commercial real estate investment into Hong Kong, which has reached US$27 billion over the past three years. But with new forms of city competitiveness emerging, what does the future hold for Hong Kong? Can it maintain its position as a World City?
The next decade will present a range of opportunities for Hong Kong. Increasing links with, and integration into, mainland China will further link Hong Kong to one of the world’s most powerful and dynamic economies. The city is increasingly being seen as part of a wider ‘Pearl River Delta city-region’, with grand infrastructure projects such as new high-speed rail services and the Hong Kong-Macao-Zhuhai bridge building interconnectivity. Such links could cement Hong Kong’s position as the primary gateway to the rest of China.
Hong Kong also has an important role to play in the internationalisation of RMB-finance as Asia Pacific’s foremost financial hub, which currently processes roughly two-thirds of the world’s offshore RMB payments. Meanwhile, China’s ambitious ‘One Belt, One Road’ project will provide Hong Kong with an opportunity to become the go-to source for infrastructure funding in the region.
However, emerging challengers from mainland China offer new competition to Hong Kong’s position as one of the region’s pre-eminent financial hubs. In China, both Shanghai and Shenzhen have strong ambitions to become global finance centres, while Qingdao has been designated as a new pilot zone for wealth management.
Hong Kong is also one of the foremost higher education hubs in the region, and must continue to leverage this advantage. While its strength currently lies in the financial services sector, the global economy is increasingly dominated by large tech firms – such as Google, Apple and Facebook. Hong Kong will have to adapt and innovate, focusing more on the digital, high-tech and creative industries. It currently ranks 22nd in 2ThinkNow’s Innovation Cities Index. The city is in a strong position, particularly when it comes to the development of the ‘fintech’ sector, which could emerge alongside existing financial services firms.
Hong Kong is one of the most expensive places for both commercial and residential space in the world. JLL’s Premium Office Rental Tracker shows that rents for premium office space in Hong Kong are the highest globally. Despite the city’s successful densification, lack of available space remains an issue – with both decentralisation and regional integration offering potential solutions to this problem.
It is impossible to say how Hong Kong will look in fifteen or twenty years’ time, but the city already possesses all the characteristics of a successful global hub and must continue to adapt to the changing global economy and the new geography of competition.