Commentary

The new Individual Income Tax Law, which came into force in China on 1st January 2019 (“New Tax Law”), is a strong response to the strong criticism and social discontent under the previous legislation.

Hong Kong citizens are heavy road users, with over 12.6 million passenger trips on public transport taken every day, and 354 licensed vehicles for every kilometer of road in the city. The congestion costs residents 36% of extra commuting time per year, compared to free-flowing traffic. The city is proud of its public transportation systems and citizen mobility in general, but it can still drive more efficiencies.

According to Hong Kong Police statistics, financial losses due to cybercrime reached $2.77b in 2018 in the territory, almost doubling the figure for 2017. As technology becomes more sophisticated and ubiquitous, cybercriminals’ skills and tools are evolving and cybersecurity experts are having to work harder to catch up.

Hong Kong is emerging as a digitally sophisticated nation being named by The Digital Evolution Index, the third most advanced digital economy in APAC, and the ninth in the world. The city was named as one of just 10 digital elites, characterised by high levels of digital development and a fast rate of digital evolution. Further, according to the Asian Digital Transformation Index, Hong Kong is recognised as one of the top thriving economies thanks to new-age, digital capabilities– only behind Singapore, South Korea, and Japan. It’s predicted that digital transformation will add $70.6b (US$9b) to Hong Kong’s GDP in the next three years, and increase the economic growth rate by 0.5% every year. Digital technologies such as cloud computing, Internet of Things and artificial intelligence contributed only 5% to Hong Kong’s GDP last year, and is expected to grow in value by a whopping 60% by 2021. If that doesn’t paint a clear enough picture, another telling sign that Hong Kong is a digitally ready nation is that consumers are themselves adjusting rapidly to a digital future. Additional research conducted by Verint and Opinium Research LLC, drawing on interviews with more than 2,000 people in Hong Kong, show that Hong Kongers are more comfortable than their regional neighbours having their enquiries attended to digitally. Whilst they like to speak to someone in person or on the phone for support at times (55%), this will drop to 50% in the next 5 years when 1 in 2 customers will turn to pure digital channels for support include AI-driven technologies, chatbots and virtual personal assistants.

By Wen CHEN, Principal at Oliver Wyman

There is an uncertainty in the retail landscape with wildly differing views on where 2019 is headed, as leading economists are writing off 2019 as a bad year for retail whilst other reports stated that retail improved between December and January due only to seasonal factors.

The new international accounting standards on treatment of leases will have a serious impact on the financials and operations of many companies in Hong Kong.

The 2019 Standard Chartered Hong Kong Marathon saw a record number of participants take part in this annual race. After the event, social media feeds were flooded with posts from marathon-going friends and friends of friends; complete with high-quality photos from professional and amateur photographers.

Data hacks, security breaches, vulnerable IT systems – these are all hot topics in Hong Kong at the moment. With high-profile data security stories dominating headlines, the importance and fragility of personal data are very much in the public eye and have turned everyone’s attention to what businesses are doing ­– or not doing – to safeguard this data.

Governments around the world are putting policies in place to curb carbon emissions in line with the Paris Agreement on climate change. With a significant proportion of the urban population spending much of their time in commercial buildings, the onus is on the real estate industry to provide sustainable properties that will mitigate negative environment impacts. Many countries in the Asia Pacific region are implementing aggressive measures to address environment challenges such as rising carbon emissions, which is spurring the introduction of incentives to construct green buildings. Hong Kong is no different; it continues to make strides to protect its world class status through its sustainable development as a ‘smart city.’

Over the past few years, Hong Kong has established itself as one of the hottest global hubs for startups. As the region’s financial hub, as well as being a springboard to the burgeoning Mainland China market, local and international startup founders alike are using Hong Kong as the base to establish and launch their businesses.

E-commerce is Hong Kong’s number one side hustle pursuit, according to GoDaddy’s Gig Economy Survey in 2017, highlighting the city’s enduring entrepreneurial spirit. The growing numbers of Hongkongers involved in sideline businesses or side hustles can thank the proliferation of cloud technology, which is empowering people to put their ideas quickly, efficiently, and affordably online, as they look to acquire new customers and grow their ventures.

Two years ago, I shared with Hong Kong Business readers how we will be able to build smarter retail infrastructure through in-store artificial intelligence (AI). I am pleased to see that AI-based chatbots are now in widespread use around the world. However, the incredible potential of AI remains largely unrealised in Hong Kong, whilst the number of opportunities has expanded immensely.

According to the Global Financial Centre Index, Hong Kong ranks as the third leading global financial centre after London and New York. In 2017, the number of transactions reached 610 million in the local securities market, with stock connects to Shanghai and Shenzhen bourses bringing in even more business. This is one reason why the Hong Kong financial services industry remains a favourite target for cyberattacks.

WiFi is going to turn into an emerging marketing asset. Businesses will incorporate in their WiFi networks the ability to monitor where their visitors are and use this real time location data to engage with their customers. This is evident from a report about Wi-Fi Analytics which expects the Wi-Fi analytics market to grow at a Compound Annual Growth Rate (CAGR) of 29.54% by 2022. The survey findings on Wi-Fi usage from Hong Kong Wireless Technology Industry Association showed almost half (49.3%) of the Hong Kongers use free Wi-Fi public hotspots to connect the Internet.

Five key questions to ask when signing Belt and Road contracts