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Accelerating Development with Strategic Agility

With May just around the corner, the Labour Day holiday is the first event on the horizon. In the Mainland, this marks a five-day Golden Week holiday, during which many will take the opportunity to travel, with Hong Kong being one of the popular destinations. We anticipate that Hong Kong will welcome approximately 840 000 Mainland visitors during this Golden Week, reflecting an increase of about 10% compared to the daily average visitor arrivals during last year’s Labour Day holiday, and a rise of 13% compared to this year’s Chinese New Year.

To continuously enrich the experience of travellers to Hong Kong, the Tourism Board will launch a series of celebration activities centered around festivals and culture during the Labour Day Golden Week, following the "Super March" series. For instance, this Thursday evening at the Wan Chai Temporary Promenade, there will be a drone performance themed around three major intangible cultural heritage festivals: Tin Hau Festival, Tam Kung Festival and Cheung Chau Jiao Festival, offering a contemporary interpretation of these cultural traditions. It will be followed by celebrations for Buddha's birthday, featuring the Bathing Buddha Festival at Po Lin Monastery on Lantau Island and the Buddha's Birthday Carnival at Victoria Park. Meanwhile, the Bun Scrambling Competition and the Floating Colors Parade from the Cheung Chau Jiao Festival are must-see events for many tourists.

The past two months have featured a vibrant array of culture-related thematic events. Among them is the "Hong Kong: Through the Looking Glass" miniature exhibition at the Peak Tower, which showcases the city's landmarks, customs and lifestyle through miniature models. Meanwhile, a shopping mall has created a colorful garden using over 120,000 building blocks, and there will be a themed drone show over the sea featuring floral displays. Another highly anticipated cultural highlight is the annual "French May Arts Festival".

Thanks to a series of thematic events and large-scale international conferences, visitor arrivals in the first quarter of this year increased by 9%, reaching 12.2 million. Among them, non-Mainland visitor arrivals accounted for about 2.98 million, representing a significant year-on-year increase of 18%, while Mainland visitor arrivals also saw a 6% rise. This reflects how thematic and innovative activities are helping to attract more visitors from both overseas regions and the Mainland to the city.

The increase in visitor arrivals not only supports exports of services but also boosts the performance of the consumption market, including the retail and catering sectors. In fact, the value of total retail sales recorded a month-on-month increase on a seasonally adjusted basis in both January and February.

On the export front, the value of merchandise exports saw accelerated growth in the first quarter of this year. Exports to several major markets, including the Mainland and ASEAN, saw strong increases, while exports to the United States (US) also rose moderately.

With the support of these positive factors, the advance estimates of GDP for the first quarter, to be released this week, are expected to reflect solid performance.

Yet, looking ahead, the US’ bullying acts and unilateralism will continue to weigh on the global economic outlook. Last week, the International Monetary Fund (IMF) downgraded its global economic growth forecast for this year from 3.3% to 2.8%. This figure is significantly below the average annual growth rate of 3.7% in the two decades prior to the pandemic. The IMF also warned that escalating trade tensions could disrupt global supply chains, dampen consumption and investment, and increase financial market volatility.

As a small, externally-oriented economy, Hong Kong will inevitably be affected by the tense external environment. However, the stable growth of our country and its steadfast support will provide strong backing for Hong Kong's economic development. We have implemented a series of policy measures to assist businesses in addressing current challenges. At the same time, the Hong Kong SAR Government is fully committed to accelerating technological innovation and leveraging it to empower the transformation of traditional industries, thereby injecting new impetus into the high-quality development of the economy in the future.

In the face of a complicated and changing external environment, we must remain highly vigilant at all times, manage risks with bottom-line thinking and strive to accelerate steady economic development. Beyond achieving economic growth, we must also firmly advance the fiscal consolidation programme to ensure fiscal prudence and the sustainability of public finance. In this year's Budget, we have proposed a series of stringent measures to control expenditure growth, while moderately increasing government revenue based on the principles of “user pays” and “affordable users pay more”. The goal in mind is to maintain Hong Kong's core competitiveness and minimise the impact on the general public as far as practicable. This is a target-oriented, phased and gradual approach to restoring fiscal balance. During this process, trade-offs are inevitable; however, we have ensured the appeal and competitiveness of Hong Kong's business environment while minimising the impact on the community as a whole. This is a challenging yet essential task that must be pursued with determination.

April 27, 2025