A year on from the lifting of strict Covid-19 restrictions, Chinese New Year – also known as Lunar New Year or Spring Festival – will be greeted with the return for the first time in five years of Hong Kong SAR’s famed fireworks display and parade.

Deeply rooted in Chinese culture, the Lunar New Year begins on 10 February 2024 and marks the Year of the Dragon. Representing imperial authority and strength, the mythical dragon is one of the 12 animal signs that rotate annually in the Chinese zodiac cycle.

According to specialists in ancient Chinese divination, the dragon is associated with transformation, opportunity and rejuvenated beginnings, which some in Hong Kong are interpreting as good news in the continuing search for ways to buttress a sluggish economic recovery.


Chris Davis is a freelance journalist who writes for business titles in Asia

The anticipated rate drop will relieve pressure on Hong Kong’s asset markets

Rate fall

Writing in his official weekly blog that he expects a fall in higher-for-longer global interest rates, Hong Kong’s financial secretary Paul Chan adds that he is anticipating Hong Kong’s economy will improve during the Year of the Dragon. While expectations differ on the timing of a lowering of interest rates, Chan expects a decrease to alleviate pressure on Hong Kong’s asset markets. Pegged to the greenback, Hong Kong’s currency interest rate follows that of the US, even though Hong Kong’s economic activities are more closely interconnected with those of mainland China.

While lower interest rates would be welcomed by Hong Kong’s business community, they may not come soon enough to trigger an uptick in market conditions ahead of the Hong Kong Budget, scheduled for the end of February. With slow economic growth, the financial secretary has already made it known the government will need to cut costs and exercise more prudent control over expenditure in the coming years.

At a recent private equity forum, pointing to a lacklustre economy as well as weak land and asset sales that have led to a shortfall in government revenue, Hong Kong’s financial chief said it may take ‘a few years’ for the government to turn a profit. His comments came following an earlier warning that Hong Kong should be prepared to face a fiscal deficit of more than HK$100bn (US$13bn) when the 2023/24 fiscal year comes to a close in March. This would almost double the HK$54.4bn figure predicted in February 2023.

PwC predicts Hong Kong will return to the top three in the world for IPOs this year

Rising optimism

As weak global demand casts a shadow over business activities, the Hong Kong General Chamber of Commerce’s latest business forecast survey revealed that local companies are cautiously optimistic about their turnover prospects. Of the 200 companies polled, 37% believe business turnover will improve, about 20% expect a decrease, and 43% think it will stay about the same. The chamber also reported that businesses seem to have a more positive outlook on mainland China’s economy, with 32% saying they planned to increase capital investment in areas outside the Greater Bay Area, compared with 26% last year.

While the three-year run of insipid performance by Hong Kong’s benchmark Hang Seng stock index continued into the run-up to the Lunar New Year, PwC predicts that, despite the adverse effects of global political and economic uncertainties, capital markets will stabilise due to substantial demand for corporate development financing and a reduction in bearish factors.

The Big Four firm also predicts that 80 companies will list in Hong Kong in 2024, raising over HK$100bn in funds, and that Hong Kong will return to the top three global financing markets after slipping to a 22-year low of eighth place in the 2023 global IPO table. If this proves to be the case, it may not be so much the Year of the Dragon for Hong Kong, but more the year of its close relative, the phoenix rising.