Hong Kong's Economic Development and Transformation KC Kwok Government Economist 29 August 2007
Recent economic performance • Rapid economic rebound after SARS
HK’s strong economic rebound • Real GDP growth: 7.7% p.a. during 2004-2006, 6.3% in H1 07 • Unemployment has fallen from a high of 8.6% in 2003 to 4.1%; improvement is across-the-board • Recovery broadening to more sectors, boosting investor and consumer confidence • Inflation has remained mild
HK’s macroeconomic performance is the best in the past 20 years HK is benefiting from and contributing to China’s modernization HK is the most competitive city in China HK has lost a decade and many people are still earning less than 10 years ago China needed HK in the past; HK needs China today HK is expensive and is being overtaken by other Mainland cities Is it the best of times?Or is it the worst of times?
Is HK being marginalised? Or is HK in demand as never before? • A centre of excellence for China • Rule of law, global connectivity, protection of property rights, good governance, freedom of information and speech • Will China be managed in a Japanese style? Or will China be much more internationally oriented?
Financial services, trading and logistics led economic growth in recent years
Premier financing centre for Mainland companies * As of July 2007
The road ahead • Continue to integrate itself further into the global economy • Many companies in HK are already global or regional companies; so are a lot of individuals • Closer economic collaboration with Mainland • Go up the value chain • Quality of institutional framework and workforce • Nurture a creativity-friendly environment