Hong Kong’s Economic Development Strategy

Posted: November 7th, 2023

Hong Kong’s Economic Development Strategy


Academic Institution

2496 words



April 14, 2022

Hong Kong’s Economic Development Strategy

Rising seawater levels might be the most significant economic challenge for Hong Kong for the next few decades. The effects of climate change on coastal cities worldwide are worsening each year. Discussions on climate change and its potential implications are becoming more relevant with the realization that climate change does not impact human activities and biological life only. Coastal cities have more to lose in terms of their way of life, economies, and identity as a people. Since the turn of the 21st century, Hong Kong’s major economic sectors, real estate, and fishing, have been threatened by rising sea levels. Hong Kong’s problems of high population density and rapid urban growth have been compounded in recent years by increased flooding and encroaching seawater caused by climate change. It is estimated that 28 square kilometers of Hong Kong’s coastal land will be under seawater by 2050. Hong Kong lawmakers and other relevant stakeholders face the daunting task of developing solutions to combat rising sea levels. Rising seawater will disrupt Hong Kong’s economic development without timely and effective public planning, affecting its real estate, fishing, port, and air industries.

Impact of Climate Change on Infrastructure

Effect on Real Estate

Rising sea waters are significantly contributing to Hong Kong’s housing crisis. According to Zhang et al. (2011), Hong Kong has ranked among the top 10 most expensive real estate markets in Asia for the last one and a half-decade. Despite the city’s real estate market boom, about one-third of the properties are in areas prone to frequent flooding. The high demand for housing pushes Hong Kong’s developers into riskier ventures. Kwan (2021) reports that tycoons, such as Li Ka-Shing, are considering the final frontier as new real estate territories. Hong Kong has 18 key areas the government considers to be at high risk of flooding (Green Peace Asia, 2020). The designated locations are home to over 90,000 people. Despite publicized warnings, developers believe that land reclamation is a promising solution to the land problem. The investors ignore that the external districts face a greater likelihood of flooding. No region is more vulnerable than the northwest edge, where the new territories meet the Pearl River Delta (Kim et al., 2020). In addition to the adverse effects on ecology, rising sea waters puts residents at more risk. Lower basin households will experience increased flooding while hillside residences record frequent landslides.

Even with an improved supply of residential houses, Hong Kong will record declining real-estate demand for high-end properties. The Economic Theory claims that man is selfish, opting to live in a place where he or she can maximize their net benefits, including comfort and savings (Man, 2010). A study on the impact of rainfall and humidity on housing prices shows that an increase of one millimeter of rainfall per year results in a decline in average pricing (Man, 2010). Therefore, Hong Kong’s population will force homeowners to prefer the new territories to pay less despite the high risk of flooding. The new territories receive more average rainfall, pushing property prices down. Snow and tornados are rare in the city, making rainfall a more influential weather condition than temperature (Man, 2010). Overall, Hong Kong’s high grounds will become extremely expensive in the coming years, pushing people to migrate to offshore islands and new territories. The trend increases the pressure on developers and policymakers to design solid solutions for flooding.

Effect on Air Traffic

                       Hong Kong might soon experience reduced economic development due to reduced air traffic associated with a loss of coastal infrastructures. Hong Kong’s major airport is in an extremely low elevation coastal zone (Yesudian & Dawson, 2021). Hong Kong’s airport should anticipate internal and external disruptions to key commercial air routes. The airport was built near the seacoast to avoid human activity because of space restrictions. The height of the runway is 6.7 meters above sea level, while adjacent waters will rise by more than a meter this century (Yesudian & Dawson, 2021). An extreme tropical cyclone might flood the runway at some point in the future. Hong Kong is also experiencing higher air temperatures. The higher temperature might make it harder for aircraft to take off. According to Yesudian and Dawson (2022), high temperature and associated pressure changes alter the loading weight of an aircraft. Therefore, airplanes leaving and arriving in Hong Kong will require a longer runway soon. Overall, Hong Kong’s airport might soon experience internal and external disruptions to key commercial air routes.

Hong Kong’s air industry should anticipate short-term, frequent disruptions to traffic flow for infrastructural development. Hong Kong International Airport requires heavy funding for infrastructural improvements to deal with climate change. For instance, the height of the runway needs to be increased by at least a meter and a half, while the airport’s seawall must stand at least 22 feet above the current waterline (Ives, 2017). The airport also should introduce new operational standards in response to the changing weather conditions. The numerous infrastructural requirements for Hong Kong’s airport imply reduced profitability of the air industry in coming years. Therefore, Hong Kong’s government will have to invest billions in upgrading its infrastructure to withstand the effects of climate change.

Effect on Port Related Activities

            Hong Kong’s port is crucial to the island’s economic development. Accordingly, Hong Kong will need significant financial investment to safeguard its port from rising sea levels. Victoria Harbor is becoming increasingly vulnerable to tropical typhoons due to rising seawater levels. The port is crucial to the island’s economic development. In 2018, the Government’s Civil Engineering and Development Department (CEDD) began implementing a new port manual design following the destruction of roads leading out of Victoria Harbor by typhoon Mangkhut (Du & Luh, 2019). The destruction caused by the storm highlighted the ineffectiveness of the city’s drainage system in extreme weather conditions. Research highlights that the port is highly vulnerable to high tides caused by a drop in air pressure and increased wind speed (Qiang et al., 2021). Stronger and bigger waves should be a key concern in infrastructural improvements for the port.

The existing port’s walls will not withstand the power of waves in the coming years. The highest seawater level recorded at Victoria Harbour was 3.96 meters in 1962. Superstorm Wanda created tides four times the normal level just twenty kilometers from Hong Kong’s coastal area (Qiang et al., 2021). Typhoon Mangkhut created tides nearly 3.5 meters high. Despite Victoria Harbor having well-designed wave walls to prevent overtopping, poor drainage accounted for most of the destruction during the typhoon. While Hong Kong airport considers infrastructure upgrades for flooding, Victoria Harbor also needs to be strengthened against extreme storms. Overall, the cost of upgrading the city’s infrastructure to withstand the effects of climate change will directly impact the city’s economic development.

Effect on Hong Kong River Villages

Frequent flooding and increasingly powerful storms gradually destroy Hong Kong’s ancient river villages. The rising tides come with powerful storms that flood and destroy river villages. The Pearl River Delta was one of Hong Kong’s major tourist attractions in the 80s and 90s due to the wooden houses built on stilts (Yi, 2018). In 2017, typhoon Mangkhut delivered waist-deep flooding, destroying most of Tai O, Hong Kong’s last major river village. The small water community is home to nearly 2000 residents. Environmental activists claim the fishing village might not exist as early as 2035 (Yi, 2018). Another cause for the decline in river villages is the depletion of fish in the rivers. Increasing seawater levels and overfishing have driven fish more outwards. Therefore, fishermen must go further and stay out longer to catch fish. The government’s ban on trawling has had little effect on the marine population. Flooding and a lack of food are major concerns associated with climate change causing the loss of river villages in Hong Kong.

Increased flooding and wind speed erode Hong Kong’s hillsides, adversely impacting the river delta with rock, sand, and concrete. Increasing amounts of silt during the wet season have significantly contributed to the loss of marine life (Bove, 2021). Hong Kong’s land primarily consists of undeveloped terrain with a thin line where urban development begins. Landslides are common during heavy rainfall, resulting in slope failures. Urban development increases the risk of landslides (Mak et al., 2021). Although Hong Kong’s government has implemented several rainwater drainage systems, the draining silt often ends up in the delta. The threat of more tropical storms and urban development will magnify the effect of soil erosion on river villages. Apart from the impact that the loss of the villages will have on the city’s economic development, there is also the potential loss of a traditional cultural way of life. Fortunately, the potential loss of the traditional villages has led to an influx of tourists who wish to view what people now term ‘The Venice of Hong Kong.’

Impact of Climate Change on the Fishing Industry

Impact on Marine Life/Biodiversity 

Hong Kong is one of the world’s largest consumer markets for seafood. As an island, Hong Kong has a high consumption of seafood. Accordingly, Hong Kong, to some extent, relies on its fishing industry for its economic development. Unfortunately, the growing population risks starvation with changing climate conditions. In the recent past, rising seawater levels allowed trawls to fish near coastal waters (Mak et al., 2021). Fishing landings in Hong Kong expanded rapidly throughout the 1990s. However, rising sea waters have disrupted the fishing industry through overfishing (Mak et al., 2021). The Hong Kong Special Administrative Region (HKSAR) was forced to implement a trawling ban in local waters to protect mangroves from oil and chemical pollution (Mak et al., 2021). Today, only small-sized traditional boats are permitted to fish near Hong Kong’s mainland. Although the ban has led to the recovery of marine life, the fish population is yet to return to where it was in the early 1970s.

Rising seawater is changing ocean, and sea currents, contributing to Hong Kong waters increasing incapability to drain away city pollution. Research shows that Hong Kong’s eastern waters are less polluted than the west and central parts (Hong et al., 2021). Nevertheless, the ecosystem is quite sensitive to changing weather patterns. Anthropogenic warming has reduced global ocean circulation, increasing the salinity of Hong Kong’s coastal waters (Hong et al., 2021). The salinity is highest during the East Asian summer monsoon. The increased salinity caused by discharge from the river delta will adversely affect various animals and plants in the eastern waters. Rising seawater will also cause increased turbidity, making the coastal waters muddier. The environmental changes will have a noticeable effect on various species living in the ecosystem.

Increased turbidity due to rising seawater levels destroys and displaces breeding habitats for marine life. The power of high tides increases underwater atmospheric pressure, which will break fish eggs (Zou et al., 2021; Lily et al., 2021) Furthermore, higher tides swing, wash and break fish habitats and eggs. Fish eggs tend to flow on the surface where the waters can be rougher, reducing chances of survival. In other instances, the high tides will transport and smash the eggs against coastal rocks. Certain fish species will have to migrate further away from Hong Kong to identify new breeding places. A sudden loss of river water plant life will translate into a decline in the fish population. Disruption to the delicate marine life ecosystem poses a significant threat of extinction for various fish species (Lam & Roy, 2020). Increased levels of salinity will also encourage more fish migration. Tao et al. (2018) identified four stomatopod species (shrimps) that have become less abundant due to high salinity in the last two decades. Hong Kong might still be the pearl of the South China Sea, but its diverse marine life will drastically be affected by climate change.

Impact on Fishing

Climate change is forcing Hong Kong to rethink its conventional fishing practices and overconsumption of seafood. The fishing industry is crucial to Hong Kong’s economy, but the dwindling fish population threatens the country’s economy. Every 4 am at Aberdeen wholesale fish market, 60 to 100 fishing vessels carrying nearly 70 tons of seafood arrive (Knott, 2017). Environmentalists warn that current climate conditions cannot support such excess fishing activity. Government statistics indicate a surge in fish imports and local fish farms (Knott, 2017). Fishermen are investing in community fish farms to counter the declining fish population. As aforementioned, several issues related to climate change are responsible for the dwindling fish population, including increased water salinity and loss of breeding grounds. Local fish farms are attempting to conserve threatened species, such as the squaretail coral grouper and Bluefin tuna (Lotze et al., 2011). Resorting to modern fishing practices highlights the drastic impact climate change has on the wild fish population. 

Hong Kong is experiencing a gradual loss of the fishing profession with the erosion of fishing villages. In the 1960s, Plover Cove Reservoir had six traditional fishing villages (Tam et al., 2013). The main economic activity in the region was fishing. Three of the fishing villages are no longer habitable due to changes in seawater levels. Tourists and people of Chung Mei, Wang Leng Tau, and Ha Wan have to wait until the water recedes to identify traditional pottery shards, fishing nets and wooden rods (Tao et al., 2018). Remaining villages like Tai O have become impoverished, resulting in massive rural to urban migration. A very small number of the younger generation has been left to learn traditional fishing. The gap also affects large-scale trawl fishing, as the industry faces a declining number of available manual labourers. Climate change has altered the culturally alluring fishing villages into ghost towns for the ageing population.


Climate change is an increasingly pressing concern, with island nations being particularly vulnerable to the implications of climate change. The economic implications of the rising tides and flooding will be severe for Hong Kong in coming years. Rising seawater levels are causing catastrophic weather events and increasing Hong Kong’s risk of flooding. Increased annual rainfall impacts Hong Kong’s housing market by reducing demand for high-end properties. People are paying extremely high prices to access hillside residences, which are less prone to flooding. Increased rainfall is also changing the housing market by destroying traditional fishing villages. Moreover, the decline in fish population due to increased water salinity and reduced breeding grounds equally contribute to the loss of the fishing villages. Consequently, the food security concerns caused by climate change affect Hong Kong’s fishing industry, affect economic development.  The extinction of fish species is a concern because Hong Kong fisheries capture billions of HKD worth of fish every year.

Rising seawater comes with stronger storms, which affect conventional fishing, air traffic, and port operations. Hong Kong requires massive infrastructure development projects to protect critical economic infrastructure, including the airport and the port, from the effects of rising seawater. Ultimately, Hong Kong and other island countries need to prepare purposely for the negative impacts of climate change more than mainland countries.


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