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In Hong Kong and Macau, the economic outlook appears bleak, according to Benjamin So, Chairman of the Hong Kong Sustainable Seafood Coalition and founder of distribution company 178 Degrees. So highlights a notable downturn in business, particularly in the middle-to-high range market segment, which constitutes a significant portion of their customer base. Chris Hanselman, Head of seafood distributor Pacific Rich Resources, echoes this sentiment, attributing the decline to a broader reduction in consumer spending, aligning with economic forecasts.
The Economist Intelligence Unit (EIU) projects a modest expansion of Hong Kong's GDP by 3.2 percent in 2024, but anticipates a drop to an average of 2.3 percent between 2025 and 2028. A key factor driving this slowdown is identified as slower private consumption growth by the EIU. Furthermore, the EIU predicts a more interventionist approach from China's government in addressing social issues such as housing shortages in Hong Kong. While this may resonate with lower-income groups in the city, it has also eroded confidence in sectors like finance and legal services, which contribute significantly to high-end spending on catering.
Compounding the challenges for food suppliers and producers, China has intensified efforts to promote domestic leisure tourism, diverting tourists who typically indulge in luxury items, including seafood, away from Hong Kong. Prior to the pandemic, tourist spending accounted for approximately one-third of Hong Kong's total retail sales, with tourism representing about 4.5 percent of GDP. Despite its status as the world's fifth-largest per-capita consumer of seafood, Hong Kong's consumption patterns face significant disruption amidst these economic challenges.
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