Hong Kong is recognized as one of the more competitive economies, and its relaxed business environment not only benefits the economic development of the region but also significantly enhances its ability to attract foreign investment and immigration. Historically, Mainland China has been the main investor in Hong Kong's economy, ranking as the third-largest source of foreign direct investment. Many investors with plans for overseas property are choosing immigration to Hong Kong as a springboard to the international market. The creation of Hong Kong's open business investment environment is inseparable from the government's efforts. The Competition Ordinance officially takes effect on the 14th, aiming to promote the establishment of a fair competitive business environment.
The Competition Ordinance stipulates that no business entity shall enter into agreements that obstruct, restrict, or distort competition in Hong Kong or abuse market power. The Chairman of the Competition Commission, Hu Hongyu, explained that the ordinance aims to combat collusive pricing, predatory pricing by large enterprises, and mergers that weaken competition.
The Secretary for Commerce and Economic Development, Edward Yau, stated that experiences from around the world show that competition laws primarily target serious anti-competitive behaviors and the abuse of power by enterprises. This ordinance is a milestone in promoting free market competition.
Some analysts believe that after the implementation of the law, retailers are expected to set prices freely, allowing consumers to shop at lower prices, but it may also lead to large conglomerates engaging in predatory pricing, affecting the survival space of small businesses.
During the past weekend, large chain digital product retailers significantly reduced prices, with some new smartphone models seeing price cuts of over 20%. The Chairman of the Hong Kong Consumer Electronics Alliance, Fang Baoqiao, stated that although the competition law only took effect on the 14th, suppliers were already unable to restrict retail prices last weekend. He expressed concern that if the "price war" continues, small businesses may struggle to survive, with a potential 30% to 40% closure rate within a few months.
Hu Hongyu stated that when large businesses abuse market power by engaging in loss-leading practices to undermine small businesses, it constitutes a violation of the ordinance, and thus the new law can assist small businesses. The Commission has received approximately 500 complaints and inquiries from various sectors, most of which are related to collusive behavior. She suggested that small businesses adopt new business strategies, such as collective purchasing, to enhance competitiveness.
Professor He Luosheng, an adjunct professor of economics at Lingnan University, believes that the implementation of the competition law will generally increase the survival space for small businesses and also increase consumer choices, which in the long run will help the market to naturally regulate prices, benefiting commercial activities.