HONG KONG – Hong Kong’s labour market has seen its sharpest drop on record, underscoring the city’s challenges with an ageing population and outflow of talent.

The Asian hub’s working population fell by 94,100, down 2.4 per cent in 2022, according to data released on Monday by the Census and Statistics Department. This is the largest plummet since the government began keeping records in 1985.

Hong Kong is facing an uphill battle as the government seeks to kick-start an economy that recorded its third annual contraction in four years. Tens of thousands of people, including lawyers and bankers, left the city following the implementation of the national security law and strict pandemic curbs.

A manpower shortage will affect services for the public and the city’s competitiveness, Hong Kong Chief Executive John Lee said at a daily press conference on Tuesday.

He has made attracting talent a key priority for his administration. Last October, he started a global talent programme that includes a two-year visa plan for high-income workers and top university graduates.

So far, most of the 10,000 or so applications are from the mainland, according to local media.

The city is also competing with Singapore to attract wealth business. The Hong Kong government announced in March that it would cut taxes for family offices.

One of Hong Kong’s biggest hurdles is staffing up its tourism sector that has been dented by Covid-19 curbs. The industry, along with exports, could help the economy grow by an estimated 7.6 per cent, according to a Goldman Sachs Group forecast. BLOOMBERG