Hong Kong - Country Commercial Guide
Market Challenges-Hong Kong & Macau

Learn about barriers to market entry and local requirements, i.e., things to be aware of when entering the market for this country.

Last published date: 2022-01-20

Hong Kong:

National Security Law and U.S. Sanctions:  The imposition of the National Security Law (NSL) by Beijing in July of 2020 on Hong Kong has created a level of uncertainty regarding the business and investment climate in the city that could affect Hong Kong’s long-term attractiveness as an international business hub.  On July 16, 2021, the Department of State, along with the Department of the Treasury, the Department of Commerce, and the Department of Homeland Security, issued an advisory to U.S. businesses regarding potential risks to their operations and activities in Hong Kong.

Foreign firms are bypassing Hong Kong: The trend of foreign firms heading directly to the mainland was accelerated by China’s 2001 admission to the WTO. However, companies that go directly to China without sufficient due diligence may face higher costs and longer delays than if they had first engaged a Hong Kong-based intermediary.

The growing exodus of talent amid fears of NSL crackdown: Higher salaries and promises of quicker promotions are failing to halt the exodus of Hong Kong residents and foreign workers from the city, throwing a curveball at the Hong Kong government’s stated goals to promote economic development, foster local talent and attracting foreign professional workers. According to a survey conducted by the American Chamber of Commerce in Hong Kong between May 5 and 9 2021, more than 40 percent of its members said they are leaving or are considering leaving the city because of heightening concerns over the NSL and the Hong Kong government’s restrictive handling of Covid-19 outbreaks. Companies may face a talent shortage, especially those seeking high-skilled professionals or workers with advanced degrees.

Macau:

Gaming and tourism eclipse other sectors. The pandemic has significantly impacted Macau’s tourism and gaming sectors.  These market distortions have started to moderate in 2021 as Macau slowly opened up to mainland tourists.  Gaming revenues that mirror historical averages (in 2019, Macau’s gross gaming revenue reached US$36.6 billion) are not expected to rebound to this level until at least 2023.  However, there are opportunities in non-gaming sectors that do afford opportunities for U.S. firms including smart building, healthcare, architectural/design services etc.