AmCham HK’s 2025 Business Sentiment Survey: AmCham Members Proceed Cautiously Amidst Political and Economic Uncertainties

JANUARY 23, 2025 – HONG KONG – The American Chamber of Commerce in Hong Kong (“AmCham”) released its 2025 Business Sentiment Survey Findings Report today.

The Survey, conducted between November 2024 and January 2025, is AmCham’s annual exercise to gauge views of senior corporate members on wide-ranging topics such as Hong Kong’s business outlook, business environment, legal considerations, US-China relations, human resources, Greater Bay Area, and other sector-specific topics.

Due to a near-unanimous consensus among members regarding the critical importance of a positive U.S.-China relationship for their businesses, this relationship emerged as their foremost concern for the year. Closely following were apprehensions about the slowing Chinese economy and negative overseas perceptions of Hong Kong.

However, 76% of respondents maintained a neutral (43%) or optimistic (33%) stance about the business outlook for 2025, whereas 24% expressed pessimism.

67% anticipated a deterioration in U.S.-China relations, 25% expected stability, and only 8% held out hope for improvement. On the question of U.S. policies restricting American business investments in China, 47% foresaw an adverse impact on global business operations, 36% contemplated a re-evaluation of their long-term business strategies in China, and 32% signalled a pause in future investments there. In addition, 67% believe that the U.S. Government’s understanding of the different sectoral laws between Hong Kong and China is crucial for improving U.S.-Hong Kong relations.

Regardless of external challenges, the findings reveal a tone of cautious optimism among respondents, with 75% reporting either stable or increased revenue in 2024 compared to 2023. 35% indicated plans for business expansion, while 51% intended to maintain their current hiring practices. Many attributed Hong Kong’s competitive edge to its robust international connectivity, the free flow of capital, low taxation, its strategic positioning as a gateway to and from China, an effective legal and regulatory framework, and the free flow of information and data. Additionally, 69% regarded the Hong Kong Government as effective in addressing business concerns and seizing opportunities. Importantly, 79% of respondents expressed no intention of relocating their headquarters outside of Hong Kong.

There was an increase in confidence regarding Hong Kong's rule of law (+4%), with 70% of respondents asserting that their operations had not been adversely affected by the National Security Law or the National Security Ordinance (i.e., Article 23). However, 85% of members highlighted that the Hong Kong Government could most effectively improve U.S.-Hong Kong relations with a larger emphasis on the economy, as opposed to national security.

Nevertheless, several key factors have been identified as impediments to Hong Kong’s competitiveness, including the high cost of doing business, talent availability, the consultative process surrounding government policies, and the receptiveness to innovation and technology. Notably, human resource challenges—such as a diminishing talent pool, escalating costs, and difficulties in hiring and retaining local talent—have significantly impacted companies. In fact, 36% of respondents reported a decline in the availability of qualified personnel over the past year.

Other key findings include:

• U.S. government policies (48%) emerged as the foremost factor influencing the business environment in Hong Kong, followed closely by policies from the Chinese Central Government (43%) and those of the HKSAR Government (40%). Members highlighted that a greater emphasis on business-related issues and a focus on Hong Kong's unique international characteristics by these governments could significantly enhance U.S.-Hong Kong relations.
• Over the past three years, Hong Kong has notably strengthened its regional competitiveness in wealth management, family offices, and debt markets. Conversely, members observed a decline in regional competitiveness in transaction banking, venture capital, private equity, and security services. While Hong Kong is recognized as an advantageous environment for innovation in fintech and artificial intelligence, it falls short in sectors such as robotics, new materials, and quantum computing.
• 67% of respondents believe that Hong Kong will continue to be a preferred destination for arbitration and dispute resolution, to a significant or moderate extent. However, some members express concerns about ongoing regional competition, particularly from Singapore, which is perceived to offer a more stable legal and political environment.
• Despite the many opportunities in the Greater Bay Area (GBA), companies are hesitant about expanding their operation to the GBA due to policy and regulatory uncertainty, local competition, language & cultural barriers, data privacy laws, and foreign exchange controls.

The survey was sent to the top representatives of over 500 corporations with a response rate of 18%. The report serves as a useful reference for companies and executives to navigate through the changing business landscape regionally and globally.

The full detailed report is now available HERE.

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