HONG KONG ECONOMY PROFILE
Major Economic Indicators
HONG
ECON
PROF
K ON G
LE
No.45 (13.11.1989)
62.9 billion (+5%)
1.3% (Jun-Aug)
1988*
1989*
Population
:
5.68 million
5.74 million
Gross Domestic Product (US$):
54.8 billion (+7.3%)
GDP per capita
(US$):
9,643
10,964
Inflation
: 7.5%
9.5%
Unemployment
: 1.3%
1988
Domestic Exports
Re-exports
Imports
Trade Balance
(US$): 27.91 billion (+11%) (US$): 35.31 billion (+51%)
(US$): 63.95 billion (+32%) (US$): -0.73 billion
1989 (Jan-Sep) 21.02 billion (+ 5%) 32.67 billion (+32%) 53.88 billion (+19%) -0.19 billion
* Official estimates for 1988 figures and official forecasts for 1989 figures
GDP growth rates are in HK$ real terms
Recent Trade Developments
-
-
The growth of Hong Kong's domestic exports slowed to 5% in January-September, down from 11% for 1988. Mixed performance was recorded for Hong Kong's major markets; while exports to Asia continued to rise (+20%), sales to the U.S. (+0.2%) and W. Europe (-4%) were lacklustre. More recently, domestic exports to China have also slowed down.
Growth in re-exports remained high at 32% in the first nine months of 1989. They were supported mainly by Hong Kong's cross-border manufacturing in Guangdong. (Up to 12,000 enterprises and 1.2 million workers in Guangdong were doing assembling/processing for Hong Kong companies in 1988). While re-exports of Chinese origin continued to grow rapidly, re-exports to China started to drop in August.
The U.S. President signed the modified version of the Omnibus Trade Bill into law. This Bill's effect on Hong Kong depends considerably on the implementation of some provisions, e.g. exchange rate policy, anti- dumping, etc. The U.S. Textile and Apparel Act was vetoed by the President in last September.
The graduation of Hong Kong (as well as Taiwan, S. Korea and Singapore) from the U.S. Generalized Scheme of Preferences (GSP) came into effect on 2 January 1989. Imports under GSP amounted to 18% of total U.S. imports from Hong Kong in 1987.
Recently, the E.E.C.'s allegation against Hong Kong on dumping has increased. Affected products include denim cloth, small-screen colour T.V. sets, video tapes, audio tapes and photo-albums. For video tapes, an anti-dumping duty up to 21.9% has been imposed against Hong Kong. In response, Hong Kong trade officials and industrialists are challenging the E.E.C.'s anti-dumping rules.
Until recently, U.S. actions of anti-dumping against Hong Kong had been confined to photo albums and filler pages with an anti-dumping duty of 3.7%. In September, U.S. manufacturers filed a petition against Hong Kong acrylic sweaters.
Import liberalization prevailing in Asia, notably Japan, Taiwan, and Republic of Korea has opened up new dimensions of trade.
Economic Background
After two consecutive years of double-digit expansion, the economy recorded a 7.3% real growth in GDP last year, owing to the slowdown in domestic exports and tight capacity constraints. Official forecast for GDP growth in 1989 has been revised downward from 6% to 5%, due partly to repercussions of political events in China on domestic demand.
Consumer prices rose by 10.1% in September, mainly due to the strong economic performance. Food prices recorded the most significant increase.
Labour shortage has been notable in the construction, manufacturing and catering/hotel sectors. Unemployment rate for June-August stood at 1.3%. The Executive Council has agreed to bring in 3,000 skilled workers, including technicians and craftsmen, to alleviate the pressure. In August 2,323 overseas workers were granted admission.
Research Department, Hong Kong Trade Development Council
Great Eagle Centre, 31st Floor, 23 Harbour Road, Hong Kong. Tel: 5-8334333 Fax: 852 5 730249