Hong Kong's Economic Development and Transformation

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Hong Kong's Economic Development and
Transformation
KC Kwok Government Economist 29 August 2007
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Recent economic performance

• Rapid economic rebound after SARS

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HKs 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

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Is it the best of times?Or is it the worst of
times?

• HKs macroeconomic performance is the best in the
  past 20 years
• HK is benefiting from and contributing to Chinas
  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

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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?

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Major highways in Guangdong province
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International Herald Tribune 23 June 2006.
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Container throughput for China ports
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From manufacturing to logistics
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Growth driver Exports to the Mainland
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Offshore trade increasingly important
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Direct contribution of trading and logistics to
GDP ()
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Financial services, trading and logistics led
economic growth in recent years
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Premier financing centre for Mainland companies

• As of July 2007

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• High-end services serving headquarters

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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

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• Thank you