Economic growth moderated in the second quarter amidst challenging external environments; Inflation forecasts for 2008 revised upward.
The Hong Kong economy grew moderately by 4.2% in the second quarter of 2008. The moderation after a prolonged period of robust economic expansion indicated that the headwinds from the slowing growth in the advanced economies and lingering financial market turbulence had increasingly posed a drag on economic growth of the Asian region, including that of Hong Kong.
The Hong Kong economy is expected to grow moderately further in the rest of 2008. Considering the notable economic growth of 5.8% in the first half of the year, the economy is expected to expand by 4-5% in 2008 as a whole.
As for inflation, taking into account the faster-than-expected increase in food prices in the first half of the year, the forecast rate of increase in the underlying CCPI for 2008 is revised upward to 5.5%. Nevertheless, the relief measures announced in the 2008-09 Budget and by the Chief Executive in mid-July would help to lower the headline inflation notably in the latter part of the year. The forecast headline inflation rate for 2008 is now put at 4.2%.
While Canadian athletes were winning medals at the Beijing Olympics, the Norman Hardie Winery in Prince Edward County also won gold for Canada at the Hong Kong International Wine Fair in August. With more than 240 exhibitors from 25 countries, the winery won the “Most Appealing Wine Label for Mainland Market” medal in the white wine group.
Norman Hardie is typical of many wine entrepreneurs in Ontario as he has followed what his passion and made it his life’s work. He started his journey working as a sommelier and restaurant manager for the Four Seasons Hotel chain before breaking out on his own. “On a clay limestone hill in Prince Edward County, my passion for fine wine is put to the ultimate test,” writes Hardie. His winery is an example of how small businesses can make a big splash abroad by entering competitions and attending conferences — in fact Hardie traveled with other wineries from Ontario and B.C to successfully promote their products to Asian buyers.
This is an important win for small to medium sized Ontario and Canadian wineries as Hong Kong is an important wine-trading centre for those looking to break into the Asian and Chinese mainland market. “The removal of the wine duty is our leading advantage, while our proximity to the booming Chinese mainland market, world-class infrastructure and logistics services are also key success factors,” said Hong Kong Trade Development Council (HKTDC) Assistant Executive Director Raymond Yip.
A survey of fair participants noted nearly 90% of those interviewed either sourced new products or found new supplies while 80% said they found new customers, promoted their company or brand image and better understood the market potential in Asia and the Chinese mainland. Full survey results here (LINK: http://202.64.102.92/hktdc/download.php?fid=_phpmX7yxu)
RELATED LINKS:
Hong Kong Interntional Wine Fair
http://hkwinefair.hktdc.com/
Norman Hardie Winery
http://www.normanhardie.com
Direct links to whatever relevant HK/China wine sites are available
Other related stories:
http://gremolata.com/normhardie.htm
Over 120 delegates from 61 Canadian life science companies arrived in Hong Kong yesterday to take part in the 4th annual Canadian Life Sciences Mission to Hong Kong. This year’s mission organizers included the Canadian Consulate General in Hong Kong, the Hong Kong Trade Development Council.
The five top reasons life science companies had for joining this year’s mission were:
- To learn more about the opportunities in the Greater China marketplace for Canadian life science companies’ products and services. China is one of the top 5 pharmaceutical markets in the world. The current annual per capita consumption of western drugs is $14 versus $52-65 in most developed countries and $587 in Canada. This rapidly changing market for medical products is growing exponentially especially in key areas such as seniors because China’s population is aging faster than any other country in the world. Healthcare and medical treatment is also relatively expensive, so high quality western products are highly valued as a preventative treatment strategy. Dietary supplements or “natural health products” as they are called in Canada are the fastest growing segment in OTC products in China, with the market expected to reach $18 billion by 2010.
- To find business partners interested in licensing their technologies or distributing the Canadian companies’ products in Asia. What better place to find potential partners than by attending some of the world’s largest trade shows in Asia? The International Chinese Medicine Conference and Exhibition, the new Wine and Beverage Expo, the Hong Kong Food Expo and the Medical and Healthcare Fair will each attract thousands of exhibitors this week in Hong Kong. Many leading Canadian firms including Purity Life Health Products of Acton, Ontario are already enjoying excellent success in penetrating the Chinese and other Asian markets using the lessons learned and the connections made while participating in last year’s Canadian Life Sciences mission to Hong Kong.
- To investigate international research opportunities, facilities and potential partners for future joint R&D projects. In April 2007, the Canadian and Chinese governments announced a new joint science and technology grant program. Several bilateral international meetings established priority research areas such as life sciences. Grants with specific criteria were opened to applications last September. Canada and China have each invested $350 million dollars into the program and the first $22 million in research grants, covering 9 projects, were announced in May. Complete details on this program are available atwww.istpcanada.ca.Canada’s new natural health product regulations combined with our reputation for excellent agricultural production methods and world-class research in the medical uses of herbs are making Canadian firms and institutions extremely attractive research partners and a key reason many leading life science groups are sponsors of this event.
- To learn how to protect Canadian intellectual property by entering the Greater China market through Hong Kong. China’s research and development spending has grown at over 17% annually during the past 12 years. The Chinese biotech market, second only to the Americans’ in size, is also increasing 30% annually and is expected to reach $71 billion by 2010. It is one of six key industrial technologies targeted by the Chinese government to fuel growth in the Chinese economy. By the end of 2007 over 1160 R&D centers had also been established by multinational corporations in China. While China’s entry into the WTO and the enormous increase in R&D inside China has led to many positive changes in the Chinese government’s attitude towards protecting IP and encouraging innovation, Hong Kong continues to have distinct advantages for companies looking to mitigate risk. Its use of common law (similar to Canada) means that Hong Kong-based partner firms of Canadian companies have the right to have their court cases heard in Hong Kong and the decisions enforced inside mainland China.
- To locate low cost sources of low cost ingredients, semi- finished and finished goods that can be used to create new products for North America, new brands or specific products for Asia and licensed or co-branded products for both places. When China opened to international trade in the early 1980’s there were very few factories. Today many factories contain state of the art equipment, have world class GMP and QA certifications, and for the next few years, will also continue to have low cost labour costs. A series of new research studies identifying some of these opportunities have been posted at www.strategis.gc.ca/logistics.
If you are interested in attending next year’s Canadian Life Sciences trade mission, contact the Hong Kong Trade Development Council’s Office in Toronto or one of the other sponsoring organizations.
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