Summary:
Hong Kong and China rank closely in this year’s edition of ACI’s Digital Competitiveness Index with China coming in third and Hong Kong fourth. However, a deeper analysis of the results finds that the two economies are on starkly divergent paths.
Despite it’s early lead in high value manufacturing and services, Hong Kong has seen its performance overshadowed by China in both the Goods and Services sub-environments. While its proximity to China has allowed it to continue flourishing as a re-export center for ICT goods and e-commerce driven trade out of China, Hong Kong’s domestic manufacturing base has greatly deteriorated. Likewise, exports of digitally deliverable services and ICT services for Hong Kong have also fallen behind China both in terms of value and growth rates.
Hong Kong has maintained a slight edge in many of the other sub-environments in terms Legal Structures, ICT Foundations, Logistical Infrastructure, Human Capital and Businesses and Consumers utilization of digital technologies. China has far exceeded Hong Kong on two metrics, Investment in ICT and Fixed Capital, these two sub-environments indicate that China is expected to expand its digital economy faster and will likely soon erode the lead that Hong Kong has in other aspects.
Highlights:
1. Hong Kong and China rank closely in this year’s edition of ACI’s Digital Competitiveness Index with China coming in third and Hong Kong fourth. However, a deeper analysis of the results finds that the two economies are on starkly divergent paths.
2. Hong Kong has seen its performance overshadowed by China in both the Goods and Services sub-environments.
3. China has far exceeded Hong Kong in Investment in ICT and Fixed Capital which indicates that China is expected to expand its digital economy faster and will likely soon erode the lead that Hong Kong has in other aspects.
Article By TAN, Kway Guan
Graphic By YAN, Bowen
ACI Perspectives 