Even as Hong Kong on Wednesday unveiled $10.3 billion worth of measures to support its struggling economy, ranging from tax rebates to property levy waivers, analysts say the territory needs more than a financial boost to make it more livable.
“[Hong Kong] doesn’t really have a government,” Uwe Parpart, MD & Head of Research, Reorient Financial Markets told CNBC. “We've got very cautious bureaucrats running this city and they don't have much of a vision for anything.”
Parpart says Hong Kong legislators should look to Singapore for leads, citing the city state’s success in growing the economy, especially in its push to lure talent by making the city “more livable.”
“Singapore has done a lot of that… there has been a lot of corporate headquarters that have been established there; the immigration laws are much more lenient in Singapore, the air is better when Indonesia doesn't burn,” Parpart said.
Financial Secretary John Tsang announced the relief package as he delivered his last budget speech. He warned that Hong Kong's economy could shrink in the current quarter due to a weak export market, before rebounding to post growth of 1-3 percent for 2012, down from 5 percent last year.
According to Paul Heffner, CEO of investment management firm Gen2Partners, Hong Kong’s high cost of housing represents the “biggest hurdle” in making the territory attractive to expatriates.
“There’re a couple of issues that still need to be addressed in building Hong Kong into a true global city,” Heffner told CNBC. “A lot of expats look at Hong Kong – housing is an issue, education is a tremendous hurdle.”
“Hong Kong is all about people,” he added. “If you're in finance, if you're in legal profession, if you're in the service sector, it's all about the people, and Hong Kong has to do more to make this a livable place.”