What Happened: On February 22, Hong Kong’s Financial Secretary Paul Chan delivered the 2023-24 budget.
Notably, Chan announced funding of $6.4 million (HK$50 million) to expedite Web3 ecosystem development, which will entail organizing major international seminars and workshops for young people. Also, Chan will lead a new task force to promote the development of virtual assets (VA) in the city.
Hong Kong will implement new measures to boost inbound tourism. The budget earmarks $12.7 million (HK$100 million) to attract “mega events with significant visitor appeal” that promote tourism.
Additionally, the Hong Kong Transportation Board (HKTB) will spend $31.9 million (HK$250 million) to advertise major local tourism events, such as a new pop festival and the Wine and Dine Festival, which fully returned to its in-person format in November 2022.
HKTB will also gift “Hong Kong Goodies,” which cover shopping and dining privileges, to one million inbound visitors.
The Jing Take: Many of the measures announced in the budget are not new. For instance, Hong Kong announced in late October 2022 that it would work toward the “sustainable and responsible development of the VA sector,” including giving retail investors access to related trading services. The same month, Hong Kong unveiled a 500,000 airline ticket giveaway that’s worth around $254.8 million (HK$2 billion) to attract visitors.
The severity of the COVID-19-induced economic crisis convinced Hong Kong’s government that sustained efforts are needed to revitalize its troubled economy.
Chan’s budget speech acknowledged that Hong Kong’s economy and private consumption contracted by 3.5 percent and 1 percent in 2022, respectively. In November 2022, Tim Sha Tsui’s status as home to the world’s most expensive shop rents was lost to New York City’s Fifth Avenue due to plummeting visitor numbers.
The reopening of Hong Kong’s border with mainland China brought in an influx of mainland visitors during the Chinese New Year holiday, with the number of hotel reservations increasing 557 percent year on year. But the city is locked in fierce competition with other tourist hotspots, such as Thailand and Macau, to attract Chinese visitors.
Therefore, the city is doubling down on promoting tourism while seeking to cement its position as Asia’s go-to financial hub by embracing Web3 and cryptocurrencies. This stands in sharp contrast to the approach taken by Hong Kong’s closest competitor Singapore, which tightened digital asset regulations after cryptocurrency prices plunged last year.
Hong Kong’s major selling points in this race to recover are its rich and unique cultural resources, which will be promoted by the HKTB. These advantages and new budget measures hold the potential to create a robust homegrown crypto arts market and present brands with new digital storytelling opportunities.
The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.