Financial Secretary Paul Chan said on Sunday that Hong Kong's economy has been recovering well since the border reopened, but warned that external factors such as high inflation in the US may undermine longer-term growth.

Speaking on a radio programme, Chan said tourist arrivals have returned to 70 to 80 percent of pre-Covid numbers, while private consumption has also reached about 90 percent of pre-pandemic levels.

While these factors will continue to drive the economy, Chan warned that the SAR’s performance will undoubtedly be affected by external uncertainties.

“Recently, several factors have exerted pressure on the global economy, including the economy of Hong Kong. These include high interest rates, which are expected to continue rising and persist for an extended period. Moreover, the high inflation rate in the United States will have an impact. And the geopolitical situation is also causing challenges,” he said.

The finance chief also spoke of the importance of importing strategic enterprises to the territory, as the city continues to develop itself into an IT hub.

On Wednesday, the government announced that 30 foreign and mainland companies from industries such as fintech, artificial intelligence, and data science have established offices in the SAR through the Office for Attracting Strategic Enterprises.

“When businesses cluster together, they can mutually drive each other's progress and growth. Secondly, these clusters foster business exchanges within their ecosystem,” he said.

“Thirdly, these clusters are useful in attracting talented individuals. The presence of these skilled individuals also acts as a magnet to attract further enterprises.”