1、 BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN HONG KONG 2021 | 1 BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN HONG KONG 2021 | 2 Business Sweden in Hong Kong Consulate General of Sweden in Hong Kong Swedish Chamber of Commerce in Hong Kong Team Sweden in Hong Kong 2021, all rights reserved.

2、This study may not be reproduced either in part or in full without prior written consent of Team Sweden and its constituents in Hong Kong. Photo by Andrea Bjrsell. (Report compiled by Anna Zhan, Consultant at Business Sweden and Simona Rosi, International Trade Scholar at the Swedish Chamber of Comm

3、erce in Hong Kong) BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN HONG KONG 2021 | 3 TABLE OF CONTENTS FOREWORD . 4 EXECUTIVE SUMMARY . 5 ABOUT THE SURVEY . 6 ECONOMIC OUTLOOK . 7 THE MARKET . 18 HOW SWEDISH COMPANIES SUCCEED IN HONG KONG . 26 ACTING SUSTAINABLY . 29 BUSINESS CLIMATE SURVEY FOR SW

4、EDISH COMPANIES IN HONG KONG 2021 | 4 FOREWORD Swedish companies have a strong presence in Hong Kong. They vary in size and in number of years in the market. They cover a multitude of sectors, including the financial sector, creative industries and retail. Many of them have done very well for many y

5、ears and greatly contributed to Hong Kongs successful economic development. As many as 58 per cent of the companies who received our survey have provided input to this report. We are grateful for their participation. The purpose of this survey is to increase the understanding of opportunities and ch

6、allenges that the Hong Kong market presents for Swedish companies. The previous Team Sweden Business Climate Survey for Hong Kong was published in September 2020. Since then, the Covid-19 pandemic has continued to impact Hong Kong and the rest of the world. After a period of recession and economic c

7、ontraction, Hong Kongs economy is predicted to return to growth this year. Hong Kong has also seen further significant political developments since the latest survey, including the continued implementation of the National Security Law introduced in the summer of 2020 and the adoption of changes to t

8、he election system in the spring of 2021. This years survey gives us several important indications of the current business climate, as perceived by companies. A majority of the responding companies remained profitable in 2020. Most have a more positive economic outlook today than a year ago, expecti

9、ng increased turnover and unchanged or slightly increased investments during the coming year. The main advantages mentioned by companies in this years survey when it comes to doing business in Hong Kong are the taxation system, its legal and regulatory systems and its geographical location. Personal

10、 safety ranks highest among favourable business conditions. The “Swedish brand” contributes positively to most companies work, denoting quality and sustainability. However, concerns and challenges highlighted in the 2020 survey remain in place also today. With regard to government measures to combat

11、 Covid-19, more companies considered them adequate than inadequate. Naturally, the measures had an impact on most companies, especially those affected by travel restrictions and closed borders. In terms of planning for the future, travel possibilities stand out as a key factor. High costs of rent an

12、d property have been a concern for companies for many years and are again high on the list of challenges in this years survey. Concerns also remain regarding political developments in Hong Kong, including the implementation of the National Security Law, and their impact on the overall business clima

13、te in the city. The main areas of concern for companies in this context are Hong Kongs status as an international business center, freedom of speech and the independence of the judicial system. A majority of the companies see a negative impact on the overall business climate in Hong Kong as a result

14、 of these developments. The survey indicates that many companies see significant challenges but also potential in the field of environmental sustainability in Hong Kong. Several respondents point to a need for more knowledge and awareness about developments, as well as further government action. As

15、the Hong Kong government works towards the goal of carbon neutrality by 2050, interesting business opportunities are likely to present themselves to companies that specialise in sustainable solutions. Swedish companies stand ready to contribute experience and know-how, and to help accelerate the gre

16、en transition. Hong Kong, June 2021 Christian Bergenstrhle General Manager of the Swedish Chamber of Commerce in Hong Kong Linda Bradley Trade and Invest Commissioner at Business Sweden in Hong Kong Per Augustsson Consul General of Sweden in Hong Kong ECONOMIC OUTLOOK BUSINESS CLIMATE SURVEY FOR SWE

17、DISH COMPANIES IN HONG KONG 2021 | 5 EXECUTIVE SUMMARY SAMPLE SELECTION 58% (54% previous year) of Swedish companies in Hong Kong responded to the survey 40% (53%) are in the professional services industry ECONOMIC OUTLOOK 2.9 (2.6) out of 5 a neutral but more positive business climate than a year a

18、go 61% (62%) were profitable in 2020 57% (30%) expect revenue to be higher in 2021 than in 2020 MARKET INSIGHTS Main advantages of Hong Kong are taxation system, legal & regulatory system and geographical location Main challenges are Covid-19 impacts and restrictions, high cost of rent and political

19、 developments KEY SUCCESS FACTORS Top success factors are cost efficiency, local partnerships, and staff development 75% (71%) believe that the Swedish brand contributes to their business SUSTAINABILITY 76% (80%) have integrated sustainability in their business model or company strategy 39% (42%) ha

20、ve gender-balanced leadership in Hong Kong ECONOMIC OUTLOOK BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN HONG KONG 2021 | 6 ABOUT THE SURVEY Companies of various size, sectors and market presence in Hong Kong are represented in the Business Climate Survey mirroring the diversity of Swedish firms

21、 How are Swedish companies experiencing the business climate in Hong Kong and the Asia-Pacific region? Since 1997, Team Sweden in Hong Kong has carried out an annual business climate survey that monitors how Swedish companies1 operating in Hong Kong perceive market conditions and economic prospects.

22、 Roughly estimated, there are around 200 Swedish companies in Hong Kong, including subsidiaries of Swedish companies and locally established companies with strong links to Sweden. The report is divided into four main sections. The first section elaborates on the economic outlook of Swedish companies

23、 in Hong Kong, including the impact of political developments during the past 12 months and the measures related to Covid-19. The second section further investigates the Hong Kong market by assessing the respondents perception of advantages and disadvantages of doing business here, in addition to Ho

24、ng Kongs regional role. The third section covers Swedish companies operations and perceived success factors. The fourth and final section explores sustainability-related aspects of business and how these factors impact companies operations. This Business Climate Survey was carried out in April 2021.

25、 It was sent to 107 (compared to 147 the previous year) member companies of the Swedish Chamber of Commerce in Hong Kong, with a total of 62 (79) respondents, a response rate of 58% (54%)2. 36% (34%) of the respondents are large companies with more than 1,000 global employees and 17% (17%) are mediu

26、m-sized companies with 250-1,000 global employees. The remaining 47% (50%) of the respondents are small companies with less than 249 global employees, of which 20% (22%) have less than 9 global employees, 14% (11%) have 10-49 global employees and 14% (17%) have 50-249 global employees. The responden

27、ts represent a diverse range of business sectors. The three largest business categories among the respondents are: professional services 40% (53%), consumer companies 18% (26%) and industrial companies 15% (15%). These figures reflect Hong Kongs highly service-oriented economy. 35% (37%) of the comp

28、anies have more than 20 years of established presence in Hong Kong, with most of them being present before 1997. Half of the respondents (51%) have operated in Hong Kong 6-20 years and 13% (11%) are newcomers with up to 5 years of presence. 1 The respondents of the survey include Swedish companies a

29、nd other members of the Swedish Chamber of Commerce in Hong Kong. When referring to Swedish companies in the report, it includes all participating companies. 2 Considering the sample size and current response rate, the survey has an error margin of 10%, implying that some results might be too vague

30、to draw significant conclusions from, especially when comparing between years. SIZE OF COMPANIES NOTE: Global employees. Large 1000. Medium 250-1000. Small 0-249. MAIN INDUSTRIES Professional services: 40%. Consumer: 18%. Industrial: 15%. Others: 26%. YEARS OF PRESENCE NOTE: Mature (-2000). Experien

31、ced (2001-2015). Newcomer (2016-). Small47%Medium17%Large36%3550130204060% BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN HONG KONG 2021 | 7 ECONOMIC OUTLOOK Swedish companies in Hong Kong remained profitable in 2020 HOW WOULD YOU DESCRIBE YOUR COMPANYS FINANCIAL PERFORMANCE IN HONG KONG IN 2020?

32、NOTE: This question had 62 responses. “Dont know/Not applicable” responses are included but not shown in the graph. SOURCE: Business Climate Survey for Swedish companies in Hong Kong 2021 A majority of the respondents, 77% (compared to 82% in the previous years survey), reported that financial perfo

33、rmance in 2020 had been profitable or reached break-even, while 15% reported a loss in 2020. These results indicate continued strong performance given the global economic downturn following the Covid-19 pandemic and recent political developments in the city. 13%20%62%15%16%61%0070LossBrea

34、k-evenProfitablePer cent BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN HONG KONG 2021 | 8 Companies perceived a more positive business climate than a year ago HOW DO YOU PERCEIVE THE CURRENT BUSINESS CLIMATE IN HONG KONG 2020? NOTE: This question had 59 responses. “Dont know/Not applicable” respo

35、nses are included but not shown in the graph. SOURCE: Business Climate Survey for Swedish Companies in Hong Kong 2021 Swedish companies perceived a more positive business climate when surveyed in April 2021, compared to in May 2020. However, compared with a longer time frame, sentiment around the bu

36、siness climate is not fully back to its 2018 level (pre-social unrest and pandemic). In December 2018, 10% of companies considered the business climate to be unfavourable or very unfavourable, 40% perceived a neutral business climate, and 51% perceived a favourable or very favourable business climat

37、e. 10%32%40%13%3%5%27%37%25%3%01020304050Very poorPoorNeutralGoodVery goodPer cent“ “We see challenges in Hong Kong but in my opinion, they are comparatively fewer than in other mature markets, especially Europe and the US, at least for pandemic-related aspects. The political situation beyond the pa

38、ndemic remains a key question. Company representative Swedish company BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN HONG KONG 2021 | 9 Hong Kongs GDP is expected to return to growth in 2021 GDP GROWTH IN HONG KONG NOTE: Real GDP, local currency unit SOURCE: Oxford Economics updated 2021-03-31 In

39、2020, Hong Kongs GDP contracted by 6.1% as the full economic impact of the pandemic rippled across global markets. The economic contraction follows the recession that started in 2019 after the anti-extradition bill when social unrest broke out, disrupting an average GDP growth of 2.9% per year from

40、2016-2018. However, as Hong Kong is a well-developed service economy where the financial sector represents a significant share, the drop in retail, hospitality and tourism had a less dramatic effect on GDP overall. Considering the uneven economic recovery and the uncertainty of the pandemic, the gov

41、ernment forecasts economic growth between 3.5%-5.5% in 2021. -8-6-4-202462002120222023Per centHong Kong, ChinaEuropeProjection Hong Kong, ChinaProjection Europe BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN HONG KONG 2021 | 10 Looking ahead, companies have a positive outlook on busines

42、s recovery expecting increased turnover and investments COMPARED TO THE DEVELOPMENT IN THE PAST 12 MONTHS, WHAT ARE YOUR EXPECTATIONS FOR THE COMING 12 MONTHS FOR YOUR INDUSTRY IN HONG KONG REGARDING TURNOVER? NOTE: This question had 62 responses. “Dont know/Not applicable” responses are included bu

43、t not shown in the graph. SOURCE: Business Climate Survey for Swedish Companies in Hong Kong 2021 Looking 12 months ahead, more than half, 57% (30%), of respondents expected their industrys turnover to increase slightly or significantly, whereas one-fifth, 21% (51%), expected that turnover would dec

44、rease slightly or significantly, compared to the past 12 months. The results show that companies expectations on sales are much more positive for 2021 compared to when they were last surveyed in May 2020, in line with a recovering Hong Kong economy that is forecasted to return to growth in 2021. 51%

45、16%30%21%16%57%0070Decrease significantly orslightlyRemain unchangedIncrease slightly orsignificantlyPer cent BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN HONG KONG 2021 | 11 WHAT ARE YOUR COMPANYS INVESTMENT PLANS FOR THE COMING 12 MONTHS IN HONG KONG, COMPARED TO THE PAST 12 MONTHS?

46、 NOTE: This question had 62 responses. “Dont know/Not applicable” responses are included but not shown in the graph. SOURCE: Business Climate Survey for Swedish Companies in Hong Kong 2021 Looking 12 months ahead, a majority of respondents, 84% (60%), planned to have unchanged, slightly or significa

47、ntly increased investments plans, while 15% (39%) planned to slightly or significantly reduce investments compared to the past 12 months. Moreover, none of the respondents, 0% (1%), planned to leave the market. A larger share of companies will maintain investments at an unchanged level in the coming

48、 year, while a smaller share of companies expect to decrease investments in Hong Kong. This indicates a positive outlook compared to the results in May 2020, when companies had to quickly adapt their business and scale down planned investments due to the coronavirus outbreak. It is noteworthy that n

49、one of the respondents have plans to leave the market. 1%39%32%28%0%15%53%31%00Leave marketSignificantly orslightly reducedUnchangedSlightly orsignificantllyincreasedPer cent BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN HONG KONG 2021 | 12 Recent political developments are perceived t

50、o have a negative impact on the business climate WHAT HAS BEEN THE IMPACT OF POLITICAL DEVELOPMENTS DURING THE PAST 12 MONTHS, INCLUDING THE IMPLEMENTATION OF THE NATIONAL SECURITY LAW, ON THE OVERALL BUSINESS CLIMATE IN HONG KONG? NOTE: This question had 62 responses. “Dont know/Not applicable” and

51、 “Dont want to answer” responses are included but not shown in the graph. SOURCE: Business Climate Survey for Swedish Companies in Hong Kong 2021 Over half of the respondents, 53%, perceived a negative or very negative impact of the past 12 months political developments (including the National Secur

52、ity Law) on the business climate, while one in five respondents, 19%, perceived a neutral impact. These results are largely in line with what respondents expected of the impact of the National Security Law when surveyed in August 20203. On the other hand, one in ten respondents, 11%, perceived a pos

53、itive or very positive impact. Also, 10% of respondents declined to answer and 7% responded dont know/not applicable. 3 Business Climate Survey for Swedish Companies in Hong Kong 2020 Add on survey: National Security Law 16%37%19%8%3%0%10%20%30%40%50%Very NegativeNegativeNeutralPositiveVery Positive

54、Per cent BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN HONG KONG 2021 | 13 WITH REGARD TO THESE DEVELOPMENTS4, WHAT ARE THE MAIN AREAS OF CONCERN FOR THE OVERALL BUSINESS CLIMATE IN HONG KONG DURING THE PAST 12 MONTHS? NOTE: This question had 61 responses. “Dont know/Not applicable” and “Dont wan

55、t to answer” responses are included but not shown in the graph. SOURCE: Business Climate Survey for Swedish Companies in Hong Kong 2021 The top concerns related to political developments in Hong Kong remain largely unchanged among companies compared to the last survey in August 20205, apart from imp

56、acts on staffing and talent shortage whisch are no longer among the top 6 areas of concern. In this years survey, impacts on freedom of speech was added as an area of potential concern. On the other hand, 11% (compared to 13% in the last survey) of the respondents stated that they had no concerns at

57、 all. 4 Refers to “political developments during the past 12 months, including the implementation of the National Security Law” in the previous question 5 Business Climate Survey for Swedish Companies in Hong Kong 2020 Add on survey: National Security Law 11%13%15%16%16%18%30%33%34%39%44%I do not ha

58、ve any concerns at allIt impacts the investment climate andaccess to capitalIt impacts data securityIt impacts access to informationIt impacts staffing and talent shortageThe risk of retaliatory measures by othergovernments (tariffs, export controls)Uncertainty regarding implementation ofthe Nationa

59、l Security LawIt affects Hong Kongs status under theOne Country Two Systems modelIt impacts the independence of the judicialsystemIt impacts freedom of speechIt jeopardizes Hong Kongs status as an international business center BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN HONG KONG 2021 | 14 HOW

60、DO YOU EXPECT THAT THESE POLITICAL DEVELOPMENTS6 WILL IMPACT YOUR COMPANYS FUTURE PLANS IN HONG KONG? Looking ahead, the potential impact of the political developments on Swedish companies future plans in Hong Kong varies. In addition to the highlighted quotes, respondents mentioned various risks su

61、ch as shrinking customer base, talent shortage and general distress and uncertainty. The overall sentiment is a continued “wait-and-see” approach combined with contingency plans in response to the uncertainty. 6 Refers to “political developments during the past 12 months, including the implementatio

62、n of the National Security Law” in the previous question “ “We might consider moving regional head office to other locations in Asia, reducing number of staff in Hong Kong Company representative Swedish company “ “Very hard to say at this stage, it really depends on how things develop. We currently

63、dont have huge concerns in the short to medium term, but we are watching the situation closely.” Company representative Swedish company BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN HONG KONG 2021 | 15 Travel restrictions due to Covid-19 have impacted companies relatively more than local restrict

64、ions on gathering and movement WHICH COVID-19-RELATED MEASURES IN HONG KONG HAVE AFFECTED YOUR BUSINESS THE MOST? NOTE: This question had 62 responses. “Dont know/Not applicable” responses are included but not shown in the graph. SOURCE: Business Climate Survey for Swedish Companies in Hong Kong 202

65、1 In terms of Covid-19 measures, companies have been relatively more affected by travel-related difficulties (such as international travel restrictions, closed borders7 as well as mandatory quarantine and testing8), than by local restrictions on public gathering, working from home/remote office, clo

66、sed schools and restricted opening hours9, which may have been easier to adapt to with flexibility. 7 Entry restriction on non-Hong Kong residents 8 For inbound travellers as well as imposed compulsory testing orders 9 For certain businesses, mainly in hospitality and leisure 81%60%35%18%13%10%10%In

67、ternational travel restrictionsClosed bordersMandatory quarantine and testingRestrictions on public gatheringWorking from home/remote officeClosed schoolsRestricted opening hours BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN HONG KONG 2021 | 16 More companies consider government measures in respo

68、nse to Covid-19 to have been adequate than inadequate DO YOU CONSIDER THE MEASURES TAKEN BY THE HONG KONG GOVERNMENT IN RESPONSE TO COVID-19 TO HAVE BEEN ADEQUATE? Per cent NOTE: This question had 62 responses. “Dont know/Not applicable” and “Dont want to answer” responses are included but not shown

69、 in the graph. SOURCE: Business Climate Survey for Swedish Companies in Hong Kong 2021 Almost half, 46%, of respondents considered that government measures in response to Covid-19 have been adequate to some extent or a great extent. On the other hand, one quarter, 25%, of respondents consider govern

70、ment measures to be inadequate to some extent or to a great extent, whereas one-fifth, 19%, were neutral. Also, 6% responded dont want to answer or dont know/not applicable. 7%18%19%27%19%05 (Not at all)2345 (To a greatextent) BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN HONG KONG 202

71、1 | 17 IF YOU DO NOT CONSIDER THE GOVERNMENTS RESPONSE TO HAVE BEEN ADEQUATE, WHAT DO YOU THINK HAS BEEN MISSING? NOTE: This question had 47 responses. “Dont know/Not applicable” and “Dont want to answer” responses are included but not shown in the graph. SOURCE: Business Climate Survey for Swedish

72、Companies in Hong Kong 2021 Among the respondents who did not consider the governments response to have been adequate, the insufficient areas were mainly that restrictions were too strict and that the government was lacking in dialogue with the business community. Apart from these areas, equally man

73、y respondents, one-fifth, responded either not enough financial support, restrictions not strict enough or dont know/not applicable. HOW DO YOU PERCEIVE THAT COVID-19 WILL IMPACT YOUR COMPANYS FUTURE PLANS IN HONG KONG? Looking ahead, travel-related difficulties remain the most commonly mentioned Co

74、vid-19 impact on Swedish companies future plans in Hong Kong. As an example, the highlighted quote mentions the comparative disadvantage of having a longer quarantine period than neighbouring countries. Apart from these travel-related impacts, other respondents indicated no impact or not much impact

75、 of Covid-19 on their future plans in Hong Kong. 43%38%19%19%Restrictions have been toostrictLacking in dialouge with thebusiness communityNot enough financial supportrelief measures for SMEs andmost affected industriesRestrictions have not beenstrict enough“ “If 21 days of quarantine will remain in

76、 place in Hong Kong, and other neighbouring countries will have e.g. 0, 7 or 14 days, we will consider moving to another more flexible hub in Southeast Asia Company representative Swedish company BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN HONG KONG 2021 | 18 THE MARKET The main advantages of H

77、ong Kong are taxation system, legal & regulatory system and geographical location WHICH ARE THE MOST SIGNIFICANT ADVANTAGES OF BEING IN HONG KONG WITH REGARDS TO YOUR BUSINESS ACTIVITIES? Per cent NOTE: This question had 62 responses. “Dont know/Not applicable” responses are included but not shown i

78、n the graph. SOURCE: Business Climate Survey for Swedish Companies in Hong Kong 2021 Despite many long-term and short-term changes underway in the city (as covered in previous sections), the top 5 advantages of Hong Kong as a business location remain unchanged; geographical location, taxation system

79、, a free-market economy, legal and regulatory system and gateway to Mainland China. These results are in line with surveys from previous years. In addition to the top 10 advantages shown in the graph, additional choices were (in falling order); Access to key customers and/or business partners, busin

80、ess potential overall, stable government and political system, public security and safety, free port status, freedom of press and unrestricted flow of information and cost of doing business. The bottom 5 choices are also largely unchanged from previous years (in falling order); physical infrastructu

81、re, IPR protection, civil service efficiency, access to start-up capital and funding and availability of international schools. These factors may not be key reasons for Swedish companies to set up operations in Hong Kong, but can still be regarded as comparative advantages compared to other cities a

82、nd business hubs. 23%26%26%26%27%35%35%39%39%42% Gateway from Mainland China Availability of highly skilled personnel Free flow of capital Communications network English language proficiency Gateway to Mainland China Free market economy Geographical location Legal & regulatory systems Taxation syste

83、mTop 3 advantages BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN HONG KONG 2021 | 19 HOW WELL DO THE FOLLOWING CONDITIONS MEET THE NEEDS OF YOUR COMPANY IN HONG KONG? NOTE: This question had 62 responses. “Dont know/Not applicable” responses are included but not shown in the graph. SOURCE: Busines

84、s Climate Survey for Swedish Companies in Hong Kong 2021 Business conditions in Hong Kong are overall considered to be favorable, as shown by all conditions scoring between 6 and 8 out of maximum 9 in the index. The relative ranking of business conditions shows that personal safety, labour market re

85、gulation, work culture/business mindset and access to service providers were considered increasingly favourable compared to their ranking in last years survey. On the other hand, customs and licenses, permits and approvals, dont meet business needs as well as before, as shown in their relatively low

86、er rank than the year prior. Still, what remains unchanged is the level of digitalisation at the bottom, as there is still vast room for improvement in this area. 123456789Personal safetyCorporate taxationPhysical infrastructureWork culture/business mindsetLabour market regulationAccess to service p

87、rovidersCustomsFinancial systemAccess to suppliersMarket accessLicenses, permits and approvalsAccess to distributorsAccess to specialists and key personnelTransparency and equal treatmentLevel of digitalisationNeutralFullyNot at all BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN HONG KONG 2021 | 2

88、0 Fewer companies use Hong Kong as regional headquarters compared to previous year WHAT IS THE PURPOSE OF THE REGIONAL HEADQUARTERS? NOTE: This question had 33 responses. “Dont know/Not applicable” responses are included but not shown in the graph. SOURCE: Business Climate Survey for Swedish Compani

89、es in Hong Kong 2021 53% of respondents (compared to 63% in the last two surveys) use Hong Kong as a regional headquarters or regional support function for their operations in Asia-Pacific, most commonly for the purpose of overall management and sales. Compared to the previous year, financial contro

90、l has been replaced by purchasing and sourcing in the top 3. These changes could be explained by a few Swedish companies that closed down their Hong Kong offices in the past 12 months. 58%48%39%36%36%27%21%15%Overall ManagementSalesPurchasing & SourcingFinancial ControlLogisticsMarketingReaserch & D

91、evelopmentManufacturing53% use Hong Kong as regional HQ for Asia-Pacific BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN HONG KONG 2021 | 21 Mainland China remains the most important market Hong Kongs competitiveness is seen to have declined WHERE IN ASIA-PACIFIC DOES YOUR COMPANY CURRENTLY HAVE BU

92、SINESS OPERATIONS? NOTE: This question had 62 responses. “Dont know/Not applicable” responses are included but not shown in the graph. SOURCE: Business Climate Survey for Swedish Companies in Hong Kong 2021 The results show that most Hong Kong-based companies conduct business in Hong Kong SAR, 79% (

93、94%), and Mainland China 68% (89%), followed by India, Singapore and Korea. The share of respondents who dont have business operations in Hong Kong SAR and/or Mainland China has increased in comparison to last years survey. These respondents are small companies with less than 49 employees locally, i

94、n fact more than half of them have less than 9 employees locally. In addition, Covid-19 travel restrictions could also have restricted companies engaged in cross-border business who used to travel frequently between Hong Kong SAR and Mainland China. 79%68%37%37%35%Hong Kong SARMainland ChinaIndiaSin

95、gaporeKoreaHong Kong SAR and Mainland China account for the largest share of Swedish companies operations in Asia-Pacific BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN HONG KONG 2021 | 22 WHICH MARKETS IN ASIA DO YOU CONSIDER MOST INTERESTING FOR YOUR COMPANY IN THE NEXT THREE YEARS? NOTE: This q

96、uestion had 61 responses. “Dont know/Not applicable” responses are included but not shown in the graph. SOURCE: Business Climate Survey for Swedish Companies in Hong Kong 2021 A majority, 64% (75%), of respondents considered Mainland China as the most interesting market for the next three years, fol

97、lowed by Hong Kong SAR, 36% (39%), and Vietnam, 31% (37%). The top 3 markets have been unchanged in the Business Climate Surveys since 2018. Among other markets of interest, Thailand was relatively more interesting compared to the previous year, whereas Taiwan was considered less so. HOW DO YOU THIN

98、K HONG KONGS OVERALL COMPETITIVENESS HAS CHANGED IN THE PAST 12 MONTHS COMPARED TO OTHER CITIES IN THE REGION AND GLOBALLY? NOTE: This question had 62 responses. “Dont know/Not applicable” responses are included but not shown in the graph. SOURCE: Business Climate Survey for Swedish Companies in Hon

99、g Kong 2021 A majority of respondents, 71%, considered Hong Kong to be less competitive or significantly less competitive compared to other cities in the region and globally in the past 12 months. Meanwhile, 16% of respondents considered it unchanged and 5% more competitive. It remains to be seen wh

100、ether these results are short-term or long-lasting. 27%44%16%5%0%01020304050Significantly lesscompetitiveLesscompetitiveUnchangedMorecompetitiveSignificantlymorecompetitivePer centOther interesting markets ranked by order (last years rank only up to no.7) 4. (5) Singapore 5. (x) Thailand 6. (6) Japa

101、n 7. (4) Indonesia 8. (x) India 9. (x) Korea 10. (x) Malaysia 11. (x) Australia 11. (7) Taiwan 12. (x) Philippines 13. (x) Macau Top 3 markets ranked by order (last years rank) 1. (1) Mainland China 2. (2) Hong Kong SAR 3. (3) Vietnam BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN HONG KONG 2021 |

102、 23 Two years after the Greater Bay Area initiative was launched, its potential impact on business prospects remains to be seen HOW DO YOU PERCEIVE THAT THE GREATER BAY AREA GOVERNMENT INITIATIVE WILL AFFECT YOUR COMPANYS BUSINESS PROSPECTS IN THIS REGION GOING FORWARD? The Greater Bay Area integrat

103、ion initiative was launched in 2018 with the aim to integrate the two special administrative regions of Hong Kong and Macau with the nine main cities across the Pearl River Delta in the Guangdong province. Looking ahead, the potential impact of the Greater Bay Area on business prospects in the regio

104、n remains to be seen. In addition to the highlighted quotes, respondents mentioned its business potential, easier access to Mainland operations and customers, no impact and not relevant. The overall sentiment of the Greater Bay Area seems to be “too early to tell”. “It will make our operations easie

105、r in terms of the flow of goods, funds, and people between our Mainland and Hong Kong operation. Company representative Swedish company “ “Great but also seems to have slowed down considerably. Too early to tell. Company representative Swedish company “ BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES

106、IN HONG KONG 2021 | 24 The US-China trade conflict does not have a widespread impact other than uncertainty and indirect impact on overall economic activity HOW DO YOU PERCEIVE THAT THE US-CHINA TRADE CONFLICT WILL AFFECT YOUR COMPANYS BUSINESS GOING FORWARD? The US-China trade conflict and subseque

107、nt geopolitical tensions have continued to claim the spotlight in the global economic landscape. The overall sentiment is that it will have no impact or potentially negative impact on Swedish companies business going forward, largely in line with the results of last years survey. In addition to the

108、highlighted quotes, respondents mentioned concerns such as impacts on value chains, restricted items and a risk factor going forward. “ “To the extent that the trade conflict has reduced overall economic activity growth Company representative Swedish company “To the extent it continues and spreads t

109、o impact Europe-China relationship Company representative Swedish company “ BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN HONG KONG 2021 | 25 Main challenges of Hong Kong are Covid-19 impacts and restrictions, high cost of rent and political development WHAT ARE THE TOP 5 FACTORS THAT YOU CONSIDE

110、R MOST CHALLENGING FOR YOUR BUSINESS IN HONG KONG? NOTE: This question had 62 responses. “Dont know/Not applicable” responses are included but not shown in the graph. SOURCE: Business Climate Survey for Swedish Companies in Hong Kong 2021 Among the top 3 challenges, Covid-19 impacts and restrictions

111、 and political developments are relatively recent concerns, while high cost of rent has been a key challenge for Swedish companies in Hong Kong for many years as seen in previous Business Climate Surveys. Compared to the previous year, economic outlook is no longer among the top 3 challenges, which

112、is a sign of market recovery, while directions from Mainland China has moved up from top 5 to top 4. In addition to the top 10 challenges shown in the graph, the bottom choices are (in falling order); complex government regulations, lack of consumer knowledge, investment climate, access to start-up

113、capital and funding, corruption and access to distribution channels. These factors may not be key challenges for Swedish companies in Hong Kong, but can still be regarded as comparative disadvantages compared to other cities and business hubs. 10%10%16%18%19%27%31%52%60%69% Environmental issues Comp

114、etition from Shenzhen and theGreater Bay Area Retain or attract skilled labour High labour costs Economic outlook Competition Directions from Mainland China Political developments High cost of rent or property Covid-19 impacts and restrictionsTop 3 challenges BUSINESS CLIMATE SURVEY FOR SWEDISH COMP

115、ANIES IN HONG KONG 2021 | 26 HOW SWEDISH COMPANIES SUCCEED IN HONG KONG Most companies have service-related operations and cost efficiency is key to staying competitive WHAT OPERATIONS DO YOU CARRY OUT IN HONG KONG? NOTE: This question had 62 responses. “Dont know/Not applicable” responses are inclu

116、ded but not shown in the graph. SOURCE: Business Climate Survey for Swedish Companies in Hong Kong 2021 Swedish companies in Hong Kong represent a diverse range of business sectors (see About the Survey on page 6): about 40% of survey respondents represent professional services, 18% consumer and 15%

117、 industrial which reflects Hong Kongs highly service-oriented economy. Regardless of business sector, companies mainly carry out service-related operations in Hong Kong, namely marketing and/or sales, provision of services and after-sales and/or support. Sourcing and trading operations is less commo

118、n than a year ago, when it was the second most common business category in Hong Kong. 48%45%27%26%16%13%8%Marketing and/or salesProvision of servicesAfter-sales and/or supportSourcing and tradingResearch and developmentOtherManufacturing and/orassembly BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES I

119、N HONG KONG 2021 | 27 TO DATE, WHICH OF THE FOLLOWING AREAS HAVE BEEN IMPORTANT TO MAINTAIN COMPETITIVENESS IN HONG KONG? NOTE: This question had 62 responses. “Dont know/Not applicable” responses are included but not shown in the graph. SOURCE: Business Climate Survey for Swedish Companies in Hong

120、Kong 2021 Cost efficiency was considered the most important factor to maintain competitiveness in Hong Kong. In addition to the citys high cost of rent, short-term revenue loss as a result of the pandemic has forced companies to adjust operating costs in order to maintain profitability or break-even

121、. Partnerships / local relationships were also considered an important factor to maintain competitiveness in Hong Kong. Business Sweden, the Consulate General of Sweden and the Swedish Chamber of Commerce all play an important role in helping companies to navigate the market and build relationships

122、with important stakeholders. Compared to the previous years survey, staff development / training has overtaken sales competence as important for competitiveness. Other factors not shown in the graph above are (in falling order): product development / adaptation, digitalisation and e-commerce, sales

123、competence, brand awareness and public affairs / relations with government. 37%29%29%27%26%Cost efficiencyPartnerships/Local relationshipsStaff development/TrainingService developmentCollaboration with/feedback fromcustomers BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN HONG KONG 2021 | 28 A stro

124、ng Swedish brand associated quality, sustainability and design TO WHAT EXTENT WOULD YOU ESTIMATE THAT THE “SWEDISH BRAND” CONTRIBUTES TO YOUR BUSINESS IN HONG KONG? NOTE: This question had 62 responses. “Dont know/Not applicable” responses are included but not shown in the graph. SOURCE: Business Cl

125、imate Survey for Swedish Companies in Hong Kong 2021 75% (71%) of the respondents perceiveed that the Swedish brand contributes to their business in Hong Kong WHICH CHARACTERISTICS DESCRIBE HOW THE SWEDISH BRAND IS PERCEIVED IN HONG KONG? 27%15%56%21%23%52%00Not at all or littlePartiallyT

126、o an extent or great extentPer cent1. Quality 77% 2. Sustainability 60% 3. Design 53% 5. Trust 42% 75% see the Swedish brand as contributing positively to their business 4. Innovation 50% 6. Safety 31% BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN HONG KONG 2021 | 29 ACTING SUSTAINABLY Continued

127、perceived low risk of corruption, human rights violations and labour rights abuses TO WHAT EXTENT DO YOU PERCEIVE THAT CORRUPTION IN HONG KONG AFFECTS YOUR BUSINESS? NOTE: This question had 62 responses. “Dont know/Not applicable” responses are included but not shown in the graph. SOURCE: Business C

128、limate Survey for Swedish Companies in Hong Kong 2021 A majority of the respondents, 76% (80%), perceived little or very little impact of corruption on their business in Hong Kong. This is largely unchanged from previous years survey. These numbers are also in line with global corruption indices. In

129、 the Transparency Internationals Corruption Perceptions Index 2020, the leading global indicator of public sector corruption, Hong Kong ranked number 11 out of 180 countries and territories, up from 16 in the year before. Hong Kong has the second-highest ranking in Asia and has maintained an index o

130、f around 77 out of 100 since 2012. 80%6%9%76%8%5%00708090Very little or littlePartiallyMuch or very muchPer centCorruption Perceptions Index Rank Index Sweden 3 85 Singapore 3 85 Hong Kong 11 77 Japan 19 74 Taiwan 28 65 SOURCE: Transparency International 2020 BUSINESS CLIMATE SURVEY FOR S

131、WEDISH COMPANIES IN HONG KONG 2021 | 30 HOW DO YOU PERCEIVE THE RISK OF ENCOUNTERING HUMAN RIGHTS VIOLATIONS AND/OR LABOUR RIGHTS ABUSES WHEN CONDUCTING BUSINESS IN HONG KONG? NOTE: This question had 62 responses. “Dont know/Not applicable” responses are included but not shown in the graph. SOURCE:

132、Business Climate Survey for Swedish Companies in Hong Kong 2021 A majority of the respondents, 71% (70%), perceived a small or very small risk of encountering human rights violations and/or labour rights abuse in Hong Kong. This is largely unchanged from previous years survey These issues are common

133、ly encountered within industries employing low-skilled labour, for example in basic manufacturing. Given that only 8% of respondents carry out manufacturing activities locally (see page 26), the risks are perceived as low in Hong Kong. However, as Swedish companies based in Hong Kong may carry out m

134、anufacturing operations in other Asian countries, the risk of encounter human rights and labour rights abuses in their supply chains outside of Hong Kong remains. 70%9%14%71%10%13%007080Very small or smallNeutralHigh or very highPer cent BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN HO

135、NG KONG 2021 | 31 Environmental considerations have increased among customers IN YOUR VIEW, TO WHAT EXTENT DO CUSTOMERS IN YOUR INDUSTRY IN HONG KONG CONSIDER ENVIRONMENTAL ASPECTS OF A PRODUCT OR SERVICE IN THEIR PURCHASING DECISION? NOTE: This question had 62 responses. “Dont know/Not applicable”

136、responses are included but not shown in the graph. SOURCE: Business Climate Survey for Swedish Companies in Hong Kong 2021 An increasing share of respondents perceived that customers consider environmental aspects when purchasing products or services. 32% (24%) answered that their customers show muc

137、h or very much environmental consideration in purchasing decisions, while 13% (22%) of the respondents perceived customers to be partially considerate and 42% (44%) estimated that customers pay little or very little attention to environmental aspects. The Sustainability Committee of the Swedish Cham

138、ber of Commerce in Hong Kong has been very active in driving the sustainability agenda and environmental policy in the past year. Among others, a policy paper on green recovery called for a green dimension to drive sustainable growth in Hong Kong, highlighting policy recommendations to tackle both j

139、ob creation and long-term low-carbon transition in October 2020.10 Several respondents pointed to a need for more knowledge and awareness about environmental sustainability, as well as further government action. As the Hong Kong government works towards the goal of carbon neutrality by 2050, interes

140、ting business opportunities will most likely present themselves to companies with experience and know-how in green solutions. 10 http:/.hk/swedcham-hks-sustainability-committee-a-green-recovery-calling-for-a-green-dimension-to-drive-sustainable-growth-in-hong-kong/ 44%22%24%42%13%32%01020304050Very

141、little or littlePartiallyMuch or very muchPer cent BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN HONG KONG 2021 | 32 Swedish companies are actively working with sustainability, which contributes to their profitability IS SUSTAINABILITY WORK PART OF YOUR COMPANYS BUSINESS MODEL OR STRATEGY? NOTE:

142、This question had 62 responses. “Dont know/Not applicable” responses are included but not shown in the graph. SOURCE: Business Climate Survey for Swedish Companies in Hong Kong 2021 Swedish companies are often seen as pioneers within the field of sustainability, being at the forefront of incorporati

143、ng sustainable technologies into their business practices. A majority of the respondents, 76% (compared to 80% in 2020 and 67% in 2018), stated that sustainability work and efforts are part of business model or strategy in the companies they represent. Among these respondents, 86% (89%), indicated t

144、hat the sustainability work impacts profitability in fact 53% (50%) indicated that it has a medium-to-high impact on profitability. Similar results were presented in the Business Climate Survey from 2018, which shows that working with sustainability is a hygiene factor for Swedish companies now and

145、that it affects their financial performance and long-term profitability. 4%34%21%32%High impactMedium impactLimited impactNo impact76%15%9%YesNoDont know/Not applicableIF YES, DOES SUSTAINABILITY CONTRIBUTE TO YOUR COMPANYS PROFITABILITY? “ “We are 100% climate neutral, aiming for 100% fossil free t

146、ransport for our products but not sure if the market is ready to choose products that do their utmost to minimise climate impacts.” Company representative Swedish company BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN HONG KONG 2021 | 33 Many companies have proactive diversity and inclusion initia

147、tives and two out of five have gender-balanced leadership in Hong Kong DOES YOUR COMPANY HAVE A PROACTIVE DIVERSITY & INCLUSION POLICY? NOTE: This question had 62 responses. “Dont know/Not applicable” responses are included but not shown in the graph. SOURCE: Business Climate Survey for Swedish Comp

148、anies in Hong Kong 2021 53% of respondents indicated that their companies have a proactive diversity and inclusion policy, whereas 29% dont have and 18% answered dont know/not applicable. APPROXIMATELY, WHAT IS THE PERCENTAGE OF WOMEN IN LEADING POSITIONS IN YOUR COMPANY IN HONG KONG? NOTE: This que

149、stion had 62 responses. “Dont know/Not applicable” responses are included but not shown in the graph. SOURCE: Business Climate Survey for Swedish Companies in Hong Kong 2021 Swedish companies in Hong Kong continue to show a large representation of women in leading positions. 39% (42%) of the respond

150、ents stated that women represent 50% or more of their board, management and directors. Almost all of these respondents represent small-sized companies with less than 49 local employees. This result is in line with the Business Climate Surveys in 2018 and 2020. 53%29%18%YesNoDont know/Not applicable2

151、 out of 5 companies have gender-balanced leadership (board, management or director level) BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN HONG KONG 2021 | 34 BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN HONG KONG 2021 | 35 BUSINESS CLIMATE SURVEY FOR SWEDISH COMPANIES IN HONG KONG 2021 | 36 CONTACT US BUSINESS SWEDEN ask.hongkongbusiness-sweden.se CONSULATE GENERAL OF SWEDEN generalkonsulat.hongkonggov.se SWEDISH CHAMBER OF COMMERCE IN HONG KONG .hk