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HK Most Expensive Highstreet in Asia

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HK: Cultural Desert or Oasis?

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i-Perkin
Tax, Share Gains to Balance Budget?

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Dragonair CEO Stanley Hui

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China's WTO Entry Bodes Well for SAR

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2000 Issues
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the bulletin


Something to celebrate at year’s end

Season’s Greetings to Chamber members and to all readers of The Bulletin wherever they may be this festive season. There is certainly reason for celebration as the historic year 2000 draws to a close. I hope this important year was a good one for your business. It definitely has been a more positive one for your Chamber, with a better economy and the marked improvement in the Hong Kong’s external trade helping the Chamber’s finances.

With 12 months of economic recovery now behind us, and a more positive outlook for the year ahead, we should all be able to better enjoy the forthcoming festive season. Perhaps the only difficulty for business is that this time around the usual holidays all occur so close to each other -- Christmas, Calendar New Year and Lunar New Year all within a period of just four weeks. But this can be overcome with more productive use of the time spent in business.

Looking further ahead, it is apparent that while the prospects for the SAR are a lot better than they were a year ago, there are a number of uncertainties on the global scene that could upset things. Higher oil prices, volatile financial markets and a slowing US economy are among them. Offsetting these, however, is the continued good Mainland economic performance and its imminent WTO entry. Both should be positive for the SAR.

Although this probably means the SAR’s quite exceptional economic rebound from recession is now virtually complete, we can still look forward to steady, although slower, growth in the year ahead. It will be nothing like the 8.8 per cent average expansion expected for this year but it will be solid growth nonetheless.

The SAR can also look forward positively to the Mainland’s entry to the World Trade Organisation (WTO) and the more open market, greater trade volumes and expanded investment it will bring. Indeed, the SAR has already gained from the Mainland’s recent expanded role in world trade, with the big increase in China’s exports and imports this year actually powering the SAR’s recovery from recession.

This big increase in China trade revitalised Hong Kong’s own re-exports in the past 12 months, resulting in record throughput at the Kwai Chung container port and increasing demand for the SAR’s trade-related services. Exports from the Mainland were up 32 per cent in the opening 10 months of the year and the SAR followed with a 20 per cent increase. The same trends were evident in imports.

As I have said earlier, there are clearly some uncertainties facing all of us in Hong Kong trade and business in the year ahead, including the slow down in the U.S., higher oil prices and the volatile nature of financial markets. All could have a negative impact on global and regional demand and therefore on the volumes of export and import business in the immediate region, and through the Hong Kong SAR itself.

Despite these uncertainties, there is now far greater optimism in the local economy than at anytime since the impact of East Asian financial crisis was first felt in the final three months of 1997. This optimism was reflected in the Chamber’s annual Business Prospect’s Survey (BPS) prepared for the Business Summit on Dec. 13, with the summit itself featuring the SAR’s role as a global and regional hub for logistics, financial services and information technology.

Although some sectors of the local economy have not benefited as much as others from the recovery (both the retail trade and the property market spring to mind), the overall improvement in confidence should help the SAR maintain solid growth in the year ahead. We cannot, however, afford to be complacent. There are many uncertainties on the global scene and the SAR will need to remain competitive if it is to perform up to its potential. But I am sure we are all dedicated to that.

Once again, I wish you the best for the coming festive season and hope your business will continue to prosper in the coming "Year of the Snake." It should be another exciting and challenging year for us all as we adapt to the restructuring of the local economy and the continued emergence of the Mainland on the global scene. Rest assured, throughout it all, your Chamber will continue to be there in support of your business efforts.