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Richard Wong

Rethinking Hong Kong’s Human Resources and Competitiveness:

What Hong Kong will be like -- the next two decades

The CEO Manpower Conference 2005, 18 May 2005

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1. The impact of demographic changes on the economy is deep and long.

The border during the early years was unrestricted and there were net movements of population in both directions.

The immigration wave from Mainland China into Hong Kong in 1945-1950 is the most important reason for the post war economic miracle and continues to shape HK’s future.

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Five-year percentage change of HK population by age group

Age1961-1966

1966-1971

1971-1976

1976-1981

1981-1986

1986-1991

1991-1996

1996-2001

2001-2006

0-4 1.98 -20.49 -1.85 4.07 0.43 -11.36 2.52 -27.00 -0.94

5-9 24.37 -2.70 -19.58 0.56 0.67 -2.17 -5.44 2.61 -17.05

10-14 27.75 18.51 0.94 -16.78 -1.84 -4.24 4.39 -1.80 6.16

15-19 132.80 15.11 20.12 7.62 -20.49 -8.16 6.73 0.07 2.33

20-24 -0.98 70.25 29.81 36.49 -6.13 -19.96 4.55 -1.89 2.16

25-29 -17.27 0.84 70.36 40.19 21.20 -2.56 -9.87 -2.58 -4.27

30-34 -7.13 -14.23 3.82 93.93 21.33 22.34 5.83 -11.92 -0.89

35-39 10.65 -3.30 -9.03 9.93 67.34 22.68 29.84 2.16 -8.92

40-44 15.56 10.25 -2.32 2.65 -1.81 65.33 29.28 24.87 3.02

45-49 14.45 17.35 12.47 7.17 -4.40 -1.47 75.84 20.43 25.17

50-54 33.34 18.60 16.54 16.47 3.23 -7.03 3.57 65.65 21.49

55-59 35.79 31.69 19.67 18.96 14.63 3.86 -1.86 -2.32 67.48

60-64 42.28 31.48 28.32 22.66 15.16 12.70 10.53 -6.66 -2.23

65-69 38.87 32.72 31.08 45.81 14.60 16.24 23.74 5.08 -3.72

70-74 45.80 43.46 26.97 40.03 28.38 12.54 29.00 16.50 9.32

The impact of demographic The impact of demographic changes on the economy is changes on the economy is deep and long.deep and long.

The impact of demographic The impact of demographic changes on the economy is changes on the economy is deep and long.deep and long.

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Hong Kong’s population is ageing – population by age groups 1921-2031

19311961

1961

1961

1971

1971

1981

1991

1991

2001 20112021

2031

2031

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

1,000,000

0-4 5-9 10-14 15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75+

With low fertility rate and restricted With low fertility rate and restricted immigration, immigration, Hong Kong’s population is aging quickly.Hong Kong’s population is aging quickly.

With low fertility rate and restricted With low fertility rate and restricted immigration, immigration, Hong Kong’s population is aging quickly.Hong Kong’s population is aging quickly.

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2. Nations are ageing but economically vibrant cities are not, but HK?

The economically vibrant cities generally exhibit stable population distributions by age, caused by immigration of the working age groups and emigration of older age groups.

One expects younger migrants in the fast growing cities eager to try their luck; whereas the older and less competitive people migrate out for less demanding careers and life styles.

Distribution by age group of the seven cities in 1990 and 2000 appears stable, with the majority of the population in the group of 20 to 44.

The population bulge of Hong Kong has shifted approximately by 10 years from 1991 to 2001. There has been mild immigration of prime working age and younger age groups into Hong Kong, but emigration of older groups is minimal.

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Distribution of population by age group (%) – China, US and UK in 1990 and 2000

China U.S. UK

Age 1990 2000 1990 2000 1990 2000

10-14 8.60 9.22 6.79 7.26 6.07 6.62

15-19 10.63 7.90 6.98 7.06 6.54 6.15

20-24 11.12 7.70 7.58 6.71 7.51 6.00

25-29 9.22 9.49 8.68 6.85 7.78 6.65

30-34 7.42 9.92 8.89 7.28 7.12 7.79

35-39 7.64 8.21 8.12 8.01 6.69 7.88

40-44 5.64 6.58 7.09 7.98 7.25 6.94

45-49 4.34 6.72 5.58 7.18 6.15 6.29

50-54 4.04 4.89 4.60 6.19 5.52 6.98

55-59 3.69 3.67 4.24 4.81 5.26 5.53

60-64 3.01 3.25 4.25 3.84 5.20 4.83

National population distribution shifts by 10 years in every 10 years.

Aging is a world-wide phenomenon. Aging is a world-wide phenomenon. Almost all nations are growing old.Almost all nations are growing old. Aging is a world-wide phenomenon. Aging is a world-wide phenomenon. Almost all nations are growing old.Almost all nations are growing old.

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Distribution of population by age group (%) – selected cities in 1990 and 2000

Beijing Shanghai GuangZhou Shenzhen Hong Kong New York London

Age 1990 2000 1990 2000 1990 2000 1990 2000 1990 2000 1990 2000 1990 2000

0-4 7.47 3.26 6.35 2.99 8.71 4.92 5.36 3.31 6.42 4.11 6.96 6.75 6.92 6.67

5-9 7.46 3.87 6.77 3.58 7.86 5.48 4.92 2.90 7.13 5.91 6.25 7.01 6.05 6.30

10-14 5.23 6.46 5.11 5.69 6.28 6.03 4.36 2.29 7.29 6.40 6.15 6.63 5.53 6.07

15-19 7.39 9.10 5.42 7.89 9.88

10.49

19.08

14.72 7.26 6.63 6.43 6.50 5.73 5.81

20-24 9.82 9.28 7.21 8.25

11.14

12.77

26.29

25.00 7.91 6.94 7.87 7.37 8.67 7.40

25-29

11.62 9.37 9.74 8.25

10.56

13.22

13.23

20.23

10.39 7.80 9.50 8.50

10.37 9.65

30-34

10.78 9.71

12.37 8.50 9.06

10.91 7.53

13.48

10.89 8.68 9.20 8.58 8.53 9.70

35-39 9.10

10.42

10.72 9.18 8.15 8.87 5.71 7.67 8.97

10.18 8.09 8.25 6.87 8.84

40-44 5.85 9.12 7.26

10.36 5.81 6.37 3.72 3.55 7.32

10.11 7.16 7.52 6.83 7.12

45-49 4.62 8.06 4.74 9.70 4.18 5.64 2.43 2.45 4.43 8.03 5.67 6.63 5.58 5.82

50-54 5.43 5.09 4.50 6.57 4.41 3.90 2.18 1.46 4.44 6.51 4.90 6.01 5.12 5.73

55-59 5.12 3.73 5.64 4.06 4.24 2.66 1.72 0.91 4.58 3.76 4.37 4.61 4.79 4.50

60-64 3.77 4.12 4.79 3.52 3.43 2.65 1.26 0.82 4.23 3.73 4.44 3.93 4.60 3.94

Among these cities, Hong Kong is the only one Among these cities, Hong Kong is the only one that exhibits ageing in its population. that exhibits ageing in its population. Among these cities, Hong Kong is the only one Among these cities, Hong Kong is the only one that exhibits ageing in its population. that exhibits ageing in its population.

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3. Hong Kong immigrants are dominated by Mainland dependants of Hong Kong men.

The largest group of immigrant population are poorly educated Mainland dependants of Hong Kong men.

Those in the 10-19 age groups are their children and those in the 25-45 age groups are their spouses.

They are systematically less well educated than the native population and those residents born in foreign countries.

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Percentage of different groups (by place of birth) of Hong Kong’s population with a university degree, aged 15 to 59

Year Born in HKBorn in

Mainland China

Born in other foreign countries

1976 1.9% 2.5% 14.7%

1981 5.0% 4.1% 20.5%

1986 4.2% 3.4% 22.5%

1991 7.5% 5.1% 26.6%

1996 13.5% 8.2% 33.6%

2001 13.3% 7.1% 26.2%

Those born in mainland are the least educated.

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Percentage of Hong Kong’s population with a university degree, aged 15 to 59 by place of birth

Born in HKBorn in Mainland

ChinaBorn in other foreign

countries

Yearas % of

all degree holders

as % of total

population

as % of all degree

holders

as % of total

population

as % of all degree

holders

as % of total

population

1976 34.9% 0.5% 46.5% 0.7% 18.6% 0.3%

1981 49.9% 1.6% 34.7% 1.1% 14.4% 0.5%

1986 50.4% 1.5% 28.2% 0.8% 21.3% 0.6%

1991 57.1% 2.8% 23.2% 1.1% 18.7% 0.9%

1996 62.0% 5.4% 19.3% 1.7% 17.6% 1.5%

2001 66.8% 5.6% 16.8% 1.4% 15.4% 1.3%

Over time, higher proportion of degree holders are born in HK.

With a “semi-closed” border With a “semi-closed” border with the Mainland, Hong Kong with the Mainland, Hong Kong has to rely on education has to rely on education investment to produce its own investment to produce its own skilled manpowerskilled manpower

With a “semi-closed” border With a “semi-closed” border with the Mainland, Hong Kong with the Mainland, Hong Kong has to rely on education has to rely on education investment to produce its own investment to produce its own skilled manpowerskilled manpower

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4. The education level of HK residents is lagging behind major fast growing cities

Unable to draw talents from the rest of the nation, Hong Kong’s human capital stock is lagging behind that of other leading economic cities like New York and London.

Fast growing Mainland cities are also catching up rapidly.

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Percentage of the population aged 15 to 59 with a university degree, among different groups (by place of birth), New York City

YearBorn in New

YorkBorn in all

other US citiesBorn in foreign

countries

1970 12.5% 15.4% 8.0%

1980 19.0% 24.6% 13.2%

1990 26.3% 39.3% 19.3%

2000 29.5% 47.4% 23.1%

Those born in other US cities are the most educated.

With an open border, New York draws on the With an open border, New York draws on the rest of the US for skilled manpower.rest of the US for skilled manpower.With an open border, New York draws on the With an open border, New York draws on the rest of the US for skilled manpower.rest of the US for skilled manpower.

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Percentage of the population with a university degree, aged 15 to 59 by place of birth, New York

Born in New YorkBorn in all other US

citiesBorn in foreign

countries

Year

as % of all

degree holders

as % of total

population

as % of all

degree holders

as % of total

population

as % of all

degree holders

as % of total

population

1970 64.4% 7.9% 23.3% 2.8% 12.3% 1.5%

1980 64.4% 11.8% 18.6% 3.4% 17.1% 3.1%

1990 62.7% 16.2% 16.6% 4.3% 20.7% 5.3%

2000 55.2% 15.9% 15.4% 4.4% 29.4% 8.5%

Over time, higher proportion of degree holders are foreign born.

New York draws on the rest New York draws on the rest of the world for skilled of the world for skilled manpower.manpower.

New York draws on the rest New York draws on the rest of the world for skilled of the world for skilled manpower.manpower.

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Percentage of Population with Educational level as degree holders, 1990 vs 2000

20009.6%

20005.4%

20003.3%

20004.3%

200030.2%

200025.6%

200022.9%

200014.8%

19909.5%

199016.8%

199020.3%

199026.0%

19915.4%

19901.6%

19902.9%

19902.2%

19903.5%

19906.1%

20019.2%

19993.8%

Beijing Shanghai Shenzhen Guangzhou China HK NY(aged25+)

US (aged25+)

London-working age

pop

UK-workingage pop

Plot-ALLCities.xlsChart-Degree+CompareALL

21%

Hong Kong’s human Hong Kong’s human capital stock capital stock is lagging far is lagging far behind behind that of other that of other leading economic leading economic centers. centers.

Hong Kong’s human Hong Kong’s human capital stock capital stock is lagging far is lagging far behind behind that of other that of other leading economic leading economic centers. centers.

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Percentage of Population with Educational level as degree holders, 1990 vs 2000

20009.6%

20005.4%

20003.3%

20004.3%

200030.2%

200025.6%

200022.9%

200014.8%

19909.5%

199016.8%

199020.3%

199026.0%

19915.4%

19901.6%

19902.9%

19902.2%

19903.5%

19906.1%

20019.2%

19993.8%

Beijing Shanghai Shenzhen Guangzhou China HK NY(aged25+)

US (aged25+)

London-working age

pop

UK-workingage pop

Plot-ALLCities.xlsChart-Degree+CompareALL

Population in cities are more educated than the national level.

With an open border, With an open border, other cities draw on the other cities draw on the rest of the nations for rest of the nations for skilled manpower.skilled manpower.

With an open border, With an open border, other cities draw on the other cities draw on the rest of the nations for rest of the nations for skilled manpower.skilled manpower.

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5. In 2031, the best educated in HK are going to be those in the oldest age group.

Without any change in the current level of investment in education and maintaining the current pattern and volume of immigration our best educated population will be among the most elderly.

In 2031, the projected HK population’s education level will still be far behind that in New York City today.

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Percentage of degree holders out of total population in Hong Kong, 1976 to 2001 and projection into 2031

1976

1981

1996

2001

2006

2011

2011

2016

2016

2021

20212026

2031

2031

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

age=15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75+

1976

1981

1986

1991

1996

2001

2006

2011

2016

2021

2026

2031

Paste-Project2031-u-grad.xlsChart%TotPop76-2031degree+

An aging population of talents An aging population of talents ahead. ahead. An aging population of talents An aging population of talents ahead. ahead.

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Projected percentage of HK population aged 15 to 64 with different levels of education

Level 2006 2011 2016 2021 2026 2031

no schooling or kindergarten and

above100.0 100.0 100.0 100.0 100.0 100.0

primary and secondary and above

98.2 97.4 97.3 97.0 96.4 95.9

post-secondary and above

29.9 32.8 36.3 39.5 41.5 42.1

University and above 13.6 15.5 17.7 19.8 21.0 21.1

Still far from 30.2% of today’s New York City.

Investment in education will Investment in education will produce additional skilled produce additional skilled manpower but not enough.manpower but not enough.

Investment in education will Investment in education will produce additional skilled produce additional skilled manpower but not enough.manpower but not enough.

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6. Hong Kong must remain a vibrant space of flow.

Maximum circulation of a diverse range of talents through the territory is crucial.

Hong Kong’s population flow pales in comparison with New York City.

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Distribution of New York and HK population by place of birth in 1990 and

2000.

NYC

NYC

born

as % of

total

US born

but not

NYC

as % of

total

Foreign

born

as % of

total Total

1990 9,397,600 65.7% 1,487,600 10.4% 3,418,800 23.9%14,304,00

0

2000 9,173,400 61.0% 1,347,000 9.0% 4,527,400 30.1%15,047,80

0  

HK

HK

born

as % of

total

China born

but not HK

as % of

total

Foreign

born

as % of

total Total  

1991 3,255,280 59.8% 1,932,900 35.5% 252,220 4.6% 5,440,400

2001 3,941,960 59.3% 2,277,700 34.2% 432,980 6.5% 6,652,640