High-tech transformation?

A comprehensive population policy is vital to address the negative impacts of dwindling labor availability and quality, on the city’s long-term economic sustainability, predicated on a high-tech transformation.

Hong Kong’s fertility rate fell to 0.751 births per woman in 2023 — far below the natural population replenishment rate of 2.1 children per woman — and is among the world’s lowest. The HKSAR government estimates that adults aged 65 and above will rise from 20.8 percent of the total population in mid-2022 to 25.3 percent in 2028, and reach 35.1 percent by 2069. The administration expects the city’s population to reach 8.19 million in mid-2046.

The Labour and Welfare Bureau estimates nearly 200,000 people aged 65 or above will be part of the working population in 2027, making them the age group with the largest growth. There will also be more workers over the age of 50, while the number of workers under 50 will shrink. The imbalance in the shortage of young manpower, will negatively impact labor quality for Hong Kong’s high-tech transformation.

The Bureau estimates that by 2027, Hong Kong will need a workforce of 3.74 million, but the projected manpower supply is only 3.57 million, indicating a shortfall of 170,000. That is only 3 years away, without tangible evidence of any effective correction. This worries economists and legislators.

Lawmakers, economists and think-tank researchers say the administration must produce a comprehensive population policy framework and long-term planning, to tackle issues arising from changes in the working population structure, on labor supply and quality.

The Office of the Government Economist says Hong Kong’s population aging would lower total factor productivity growth, and hence economic growth, by around 0.1 percentage point per annum from 2025 to 2044. An aging population will transmit the negative effect of decreasing labor supply on economic growth.