Ventures Dialogue

Without exception, the global economic crisis is hurting every economy.  Our Financial Secretary Mr. John Tsang announced in his Budget yesterday his strategies to revitalize HK’s economy.  I am pleased to highlight some of the measures that may be of interest to you and/or may generate opportunities for your companies.

Budget Highlights
HK Economic Performance and Outlook – Affected by the global downturn, HK’s GDP grew by 2.5% in 2008 and unemployment rate has risen to 4.6%.  

A two to three per cent decrease in GDP is expected for 2009.  For the medium term, the average growth rate is estimated at 3.5% in real terms for the period 2010-13. 

Despite the downturn, HK’s economic fundamentals remain strong.  We have a sizeable current account surplus that amounts to 13% of GDP, a strong net external international investment position, a sharp increase in productivity in the past few years, etc. – which are all clear indicators of the underlying strength of HK.  Continue reading ‘Message from Director of HKETO on Hong Kong 2009 Budget’

Maureen Siu, Director Hong Kong Economic Trade Office, Toronto

The following is a update on the Hong Kong business climate from Maureen Siu, director of the Hong Kong Economic and Trade Office (HKETO).

Dear Friends,

Greetings from Toronto!

In the face of the global financial storm and the looming economic downturn, and with our Chief Executive Mr. Donald Tsang having just delivered his new Policy Address entitled “Embracing New Challenges”, I would like to send this note to update you on the latest in Hong Kong and highlight some of the key points of the Policy Address.

• Hong Kong economy – We expect a rough ride ahead and are buckling up.  While some economic figures are still holding — retail sales in August grew by 3.9% in volume terms from a year earlier, and unemployment rate continued to stay at 3.2% in June-August — there have been clear signs that exports are shrinking and the credit crunch is hurting many businesses.  Economic growth has slowed to 4.2% in the second quarter.  The external environment is so uncertain and deteriorating so rapidly that we expect consumer sentiments, unemployment rate and many other areas to be impacted.
• Precautionary measures – In view of the intense stress in the global money market, the Hong Kong Monetary Authority has adopted five temporary measures to provide liquidity assistance to the licensed banks in HK on their request.  In addition, there will be full guarantee of deposits held with all authorized institutions in HK (until the end of 2010), and a Contingent Bank Capital Facility has been created to make available additional capital to locally incorporated licensed banks when needed.  These are precautionary and pre-emptive measures to further strengthen the confidence in the HK’s banking system which remains strong and robust, with capitalization well above international standards.  The measures should also promote monetary stability in HK.  The Linked Exchange Rate system, underpinned by strong disciplines of the Currency Board rules, will remain unchanged.
• Turning crisis into opportunities - A major focus of the Policy Address is to overcome the financial crisis and turn it into new business opportunities.  Mr. Donald Tsang will establish and chair a task force to develop strategies for the purpose.  At the same time, vigorous efforts will be made to promote creative industries, wine trade, scientific research, convention and exhibition services, and cross-boundary integration.
• Reinforcing HK’s position as a financial centre – As the economic development and reforms in Mainland China continue to present many new opportunities for a broader and deeper financial market, we will continue to reinforce HK’s position as a global financial centre.  Further development of the securities market such as developing the commodity futures market and an Islamic bond market are parts of the target. Continue reading ‘Hong Kong update from Maureen Siu, Director, HKETO Toronto’