“What boosting tourism can accomplish is more visible, and it can translate to GDP growth more easily and create more job opportunities,” the insider told the Post.

The source said that promoting tourism would also help improve the world’s perception of Hong Kong as visitors experienced the city for themselves.

“They will realise that Hong Kong is safer, more vibrant and liberal than some Western media have portrayed it to be. You won’t be arrested on the street for criticising the government,” the official said.

By hosting mega events including major trade exhibitions and conventions, the government also hoped that “high value” visitors such as professionals and businesspeople would take home “good stories about Hong Kong”, the insider added.

Harsh Covid-19 pandemic restrictions still in place meant visitors arriving in the city had to spend a week in quarantine in a hotel.

The city’s gross domestic product (GDP) improved during his term, reversing from a 3.7 per cent contraction to a forecast of between 2.5 per cent and 3.5 per cent growth this year.

Two issues that can impact Lee’s hopes for the economy are mainland China’s slowing growth and the effect of geopolitics, specifically anti-Chinese sentiment in the West.

Jewellery manufacturer Ricky Lam has had first-hand experience of how geopolitics can affect a businessman in Hong Kong.

The chief executive of Elegance Jewellery International, a company set up in 1991, he has operations in Hong Kong and Shenzhen and makes jewellery for wholesalers and retailers.

After an American buyer suggested he should move his production line away from the mainland to secure future orders, Lam spent months travelling through Southeast Asia scouting for a new site.

“He feared more tariffs would be imposed on made-in-China products given the current state of geopolitics and the uncertainty brought by the US presidential election,” said Lam.

As the months passed, it became clear the US presidential election would be a rematch between incumbent President Joe Biden and the man he defeated in 2020, Donald Trump.

The Biden administration has maintained a hard position on Beijing, but it was Trump who fired the first shot in the US-China trade war during his term in office and has threatened to be even tougher on China if he became president again.

Lam eventually settled on a site in Thailand for his factory, only to be disappointed when his American buyer refused to sign a contract and offered no reasons.

Lam decided to keep his factory on the mainland. “The US client later told me to expect fewer orders from him as he feared tariffs would rise further if Donald Trump was elected,” he said.

Jackson Leung Siu-yin, vice-president of the Chinese Manufacturers’ Association of Hong Kong, said the city’s manufacturers had always emphasised the European and American markets.

“But geopolitics has greatly influenced market sentiments in the past few years. Hong Kong manufacturers have generally suffered a 20 to 30 per cent loss in business with Europe,” he said.

Johannes Hack, president of the German Chamber of Commerce in Hong Kong, said geopolitics and Hong Kong’s “focus on security” had coloured the views of German firms’ stakeholders based in Europe, making it harder to draw visitors and investments into the city.

He felt Hong Kong’s focus on hosting big events to bring in targeted groups of visitors was helping.

“The German businesspeople and tourists who do come to the city leave with mostly very positive impressions. So anything that supports those activities will support Hong Kong’s image,” he said.

“For the rest, it may be a case of least said, soonest mended.”

A check by the Post found that at least 11 of the 32 annual conventions and exhibitions held in the first half of 2024 saw lower visitor numbers than in 2018.

The annual international jewellery show – one of the industry’s most important trade events – attracted about 49,000 visitors in February, 11 per cent fewer than in 2019, the last time it was held before the pandemic.

But jewellery businessman Lam argued the exhibition’s performance was “not that bad”.

“You can’t just compare the current situation with 2018 as the world has changed a lot in six years. We all should use a forward-looking mindset,” he said.

Brain drain, but city draws new arrivals too

Hong Kong’s post-pandemic recovery has been slow and uneven.

In the first three months of 2024, the city’s GDP recorded a 2.7 per cent increase from a year before. But, adjusted for inflation, that was 0.5 per cent below growth in the first quarter of 2019.

Business receipts, which track revenues of different sectors, showed insurance and banking doing best in the first quarter, growing 21.1 per cent and 24.2 per cent respectively when compared to the same period five years ago.

But receipts for the accommodation, retail and food services sectors declined 5.9, 21 and 10.4 per cent respectively from the same quarter in 2019.

In the first four months of 2024, 14.6 million visitors arrived in Hong Kong, which was 30.1 per cent lower than during the same period in 2018.

The number of mainland and Taiwanese tourists fell by 31.2 and 40 per cent respectively, while long-haul visitors, including those from Europe and the Americas, fell by 35.6 per cent over that period.

There were strong gains from some Southeast Asian markets, particularly the Philippines and Thailand.

The city also witnessed a brain drain after Beijing imposed the national security law in 2020.

As of March this year, 144,400 Hongkongers had moved to Britain through a new migration pathway, while others headed to Australia and Canada, which also offered migration schemes specific to the city’s residents.

But various talent schemes resulted in more than 110,000 people moving into the city since December 2022, most coming from the mainland.

Lawmaker Wendy Hong Wen said the government should be given time and space as it took a more proactive approach to economic development.

But the former researcher at the government’s now-defunct Central Policy Unit questioned banking on tourism for a boost.

She said while more than 65 million visitors arrived in 2018, inbound tourism contributed only 3.6 per cent of added value to that year’s GDP.

It also created an array of problems, including threatening the survival of small shops frequented by locals when retail chains popular with mainland visitors began moving into some neighbourhoods as rents surged.

Hong said most of the 98,300 job opportunities added by inbound tourism that year were also low-skilled and lowly paid, with poor prospects.

Instead of focusing on tourism, she called for industrial policies that tap into the international capital attracted to Hong Kong by its financial markets.

“You must look ahead,” she said, lamenting that Hong Kong seemed to lack the ability to plan long-term and anticipate the consequences of actions taken.

“Planting a tree today won’t get you anything tomorrow, as the outcome can only be seen 10 years later,” she said.

“So we must start now for a result that will only be delivered 10 years later, instead of leaving it to the government 10 years from now. That kind of thinking doesn’t work.”

‘Grow ties with non-Western countries’

Although calm had been restored in the city, he pointed out that polls indicated “clear and stark” polarisation among Hongkongers.

In a survey conducted by the Hong Kong Public Opinion Research Institute in May, 38.6 per cent of 676 respondents said they did not trust the government, up from 31.1 per cent in July 2022.

Those who said they trusted the government made up 47.1 per cent of respondents, almost unchanged from two years ago.

“This situation is a recipe for instability,” Burns said.

He believed Hong Kong still had some good stories to tell about its soft power, such as the city’s protection of ethnic and sexual minorities, popular culture and other things young people cared about.

“Instead, authorities led by the police blast out wolf-warrior messages that drown out everything else,” he said. “The result is that Hong Kong’s soft power chokes and withers.”

But Lau Siu-kai, a consultant for the semi-official think tank the Chinese Association of Hong Kong and Macau Studies, said if Lee succeeded in turning the economy around, Beijing would see it as proof to the world that “patriots ruling Hong Kong” worked.

He recommended establishing ties with more non-Western countries by working with Beijing to channel more capital from new partners.

“No matter who will be the next US president, the anti-China sentiment will stay, which means one should not expect the US and Western countries to welcome Lee for visits in the remainder of his term,” Lau said.

Subject to US sanctions since August 2020, he made only one foreign visit during his second year in office, a trip last July to Singapore, Jakarta and Kuala Lumpur to explore opportunities in Southeast Asia. His colleagues, however, had also been dispatched to several countries in the past two years.

It is understood Lee will visit Vietnam, Laos and Cambodia at the end of July.

In November, he will attend the Asia-Pacific Economic Cooperation Forum summit in Peru. Financial Secretary Paul Chan Mo-po represented the city at last year’s meeting in San Francisco.

Lee told the Post the South American country might be an “easy place” to promote Hong Kong as it had not been a geopolitical battleground, and city authorities had prepared “a very good information campaign”.

While Hong Kong had to defend itself when attacked, he said his priority was to make more friends and tell people what the city was capable of.

Europe remained a place to focus on as there was potential for cooperation in economic development, and he said he was considering opening more economic offices in Southeast Asia.

The government insider said there was no plan for a large-scale branding campaign overseas, especially with US politicians likely to sharpen their anti-China rhetoric during the election cycle.

“Regardless of what we do, negative narratives from Western governments and media criticising Hong Kong’s human rights situation will continue,” said the source.

Anthony Cheung Bing-leung, an adviser in public administration at Education University’s Asian and policy studies department, recognised there was a limit to what the government could do in the face of the “all-around” Western media bias against Hong Kong.

At the same time, he stressed there was no giving up on internationalism.

“Let’s be honest and pragmatic, Hong Kong’s advantages are all about our ties with the West,” said Cheung, a former transport minister.

As Beijing began to extend the olive branch to some European countries, he felt Hong Kong could play a role, given that it was “on better-speaking terms” with the West thanks to its language advantage and common law tradition.

Cheung said if the government wanted to highlight Hong Kong’s uniqueness, its overall public discourse should shift from national security and patriotism, which he considered basic responsibilities that now deserved less airtime.

“If we achieve these but nothing else, Hong Kong is making no contribution to the country,” he said. “Isn’t Shanghai doing the same good job in national security?”

Lawmaker Hong lamented that Hong Kong bureaucrats lacked the boldness to contemplate the country’s long-term international interests from a higher level.

“Passively, we can put political correctness first and parrot whatever Beijing says, which will make us no different from other mainland cities,” she said. “More actively, we can look at the country’s overarching development strategy and priorities, and identify what it really needs.”

Hong said that for one, Hong Kong could try to play a stabilising role in China’s relationship with the West, and that would serve the interests of both the country and the city.

“As a city under ‘one country, two systems’, Hong Kong should do things that other mainland cities are unsuitable for or unable to undertake,” she said.