Hong Kong's increasingly severe aging population not only hinders its medium- to long-term economic growth and affects people's lives, but also poses serious challenges to the sustainability of public finances. The Government must formulate a holistic population policy as soon as possible to effectively address the problem.
A United Nations report ranked Hong Kong as having the lowest fertility rate in the world at 0.8%. By the end of 2022, the proportion of Hong Kong's population aged 65 or above rose to 21.3%, an increase of 6.9% from ten years ago, while the proportion of its population aged 20 or below dropped from 17.6% ten years ago to 14.2% in 2023. In the first quarter of this year, Hong Kong's labor force totaled 3.76 million people, with a labor force participation rate of just 57.9%, a new low since records began in 1982.
A population policy has far-reaching implications and is wide-ranging in scope. Faced with the current manpower shortage across all industries in Hong Kong, the Government must have foresight and adopt a big-picture mindset to formulate a holistic and macro-scale population policy blueprint in the Policy Address.
As we all know, Hong Kong's population faces four major challenges, i.e., aging, declining fertility, population outflow and talent mismatch. In my opinion, formulating a holistic population policy can be divided into two aspects: internal and external.
Make full use of Hong Kong's local human resources
Internally, on the basis of taking the lead in pushing for an extension of the retirement age, the Government should strengthen retraining programmes according to the needs of the market structure and encourage suitable elderly people to stay put in the workforce. To address the intensifying decline in fertility, the Government must take a multipronged approach to accurately implement policies and establish a more friendly environment for encouraging births. The Government must remove Hong Kongers' concerns that stop them from having children in a targeted manner, formulating preferential policies on various fronts to help improve Hong Kongers' willingness to have children, rather than limiting itself to increasing tax relief and cash subsidies. Hong Kong's female labor force participation rate is 53.2%, well below the average of 73.8% among OECD (Organization for Economic Co-operation and Development) countries and economies. In view of the current general reluctance of Hong Kong companies to offer half-time or part-time jobs, the Government can consider following the example of Singapore in offering assistance to employers to entice them into creating casual or part-time jobs so that female human resources can be fully utilized.
Regarding the issue of strong outflow of the younger population, the Government must first identify the underlying reasons and make targeted improvements in consideration of young people's development needs. It should also integrate youth development with Hong Kong's positioning as the “eight centers” under the “14th Five-Year” Plan to broaden the space for young people's development and upward mobility.
Bring in foreign manpower and build a Greater Bay Area talent pool
Externally, in my view the Government's work on population can be done from three aspects. Firstly, facing up to the problems of population aging and labor shortage, advanced countries around the world have rolled out general population policies to bring in overseas labor or increase the number of permanent immigrants. I suggest the Government collect data to thoroughly examine Hong Kong's current and future manpower structures, and proactively formulate general immigration policies that are suitable for Hong Kong to attract foreign manpower.
Secondly, with the development of the Guangdong-Hong Kong-Macao Greater Bay Area, the Government can team up with Guangdong Province and Macao to study the possibility of establishing a talent pool in the Greater Bay Area and coordinating the overall population policies in the area.
Finally, Hong Kong can function as a bridge to attract immigrants into the country's “dual circulation” strategy, bringing in young high-quality talents from regions such as Southeast Asia and the Middle East to facilitate the high-quality economic development of the country and Hong Kong.
Should you have any comments on the article, please feel free to contact Mr Martin Liao.
Address : Rm 703, Legislative Council Complex, 1 Legislative Council Road, Central, Hong Kong Tel : 2576-7121
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