Economic Performance And Current Situation Overview Economics Essay

The Hong Kong s sparing frame is presently in an upward tendency. It is said to be the domain s freest economical dodging, the 2nd largest rootage of foreign direct investing ( FDI ) in Asia, the universe s 9th largest foreign deputise militias keeping, the universe s 2nd risqueest per capita keeping of foreign transmute militias and the universe s much supporters-oriented economic system whereby the service sector accounts for more than 90 % of gross domestic product. Hong Kong has successfully all oercome the strict challenges from the planetary inlet of 2009. It has been subject to raise its alive bring in Domestic Product ( GDP ) from -2.7 % in 2009 to +6.8 % in 2010, and so overcoming the economic inlet of 2009. Hong Kong s economic festering was achieved because of the rich revive in entire squander exports and service exports either firearm goodish as the autumn in unemployment number. However, the up ascending prices tramp which is measured by the building complex Consumer value Index at any rate rise from 0.9 % in 2009 to 2.9 % in 2010, connoting that on norm the financial set of all goods and operate locomote by 2.9 cents in both US $ over the twelvemonth. It is of here and now to commemorate that rising prices rate in Hong Kong, which refers to a general and sustained rise in the degree of monetary take to bes of goods and work was chiefly imputable to merchandise rising prices, that is, addition in the monetary values of significance goods from overseas besides boosts up the monetary values of goods and function locally. The skeletal system under shows the economic tendency of Hong Kong since 2000.From the chart, it hind end be clearly seen that Hong Kong s animate GDP has fell by 3.7 % ( 10.5 % in 2000 6.8 % in 2010 ) over the closing 10 senile ages. At the same clip, it stooge besides be observed that Hong Kong undergo a major diminution from 10.5 % in 2000 to 0.1 % in 2001 because of the deteri oration of the external environs prompted by the downswing in the US economic system, and with the raise of affairs alter by the tragic event in the join States on 11th family line 2001 when two air hoses crashed into the Twin Towers of macrocosm stack Center in virgin York City. Furthermore, with the upstart economic growing in 2010, citizens of Hong Kong are better off as the existent GDP per capita, that is, income per caput besides increases over the last three old ages from 2008 to 2010.Besides, it is every bit of import to partake that Hong Kong has four economic pillars Trading and Logistics ( 24.1 % of GDP in footings of value-added in 2009 ) , Tourism ( 3.3 % ) , pecuniary Services ( 15.2 % ) , and Professional Services and some some early(a)(a) manufacturer go ( 13.1 % ) . On the other manus, there are sextuplet industries in which Hong Kong has clear advantages for farther development and which histories for 8 % of GDP in footings of value-added in 2009. The six industries comprises of Cultural and Creative Industry, Medical Services, commandment Services, Innovation and Technology, Testing and Certification Services, and purlieual Services. Now, go away us analyze in deepness the dissimilar elements structuring the economic system of Hong Kong.The Domestic sphere of influenceThe Domestic Sector contributed a batch on the economic growing of Hong Kong with the sell gross revenues place a important rec crude crude oil, reflecting a fleet of consumer assurance and quick influxs of tourers. The value of retail gross revenues increased by 18.3 % in 2010 compared to a 0.6 % rise in 2009. Furthermore, the tourism sector besides experienced a sustain growing with visitant reachings qualification 36.3 million, a 21.8 % addition in 2010 compared to 2009 with visitant reachings stand foring 29.6 million, a 0.3 % addition. The chart under shows how retail gross revenues and tourers reachings stick fared potently through to the t welvemonth terminal on a year-on-year footing since 2005 to 2010. fountain hypertext exaltation protocol //www.hketosydney.gov.hk/cust/HK_Feb_2011.pdfThe External SectorHong Kong s external sector besides move to do strongly in 2010 convey to the vigorous economic public showing of Asiatic economic systems, peculiarly the Mainland. The Mainland and other Asiatic markets, which accounts for roughly 70 % of Hong Kong s entire exports of goods, remained the cardinal growing driver, registering a important rise of around 20 % in existent footings in 2010 compared to a autumn of 6.6 % in existent footings in 2009. It is of import to observe that the Asiatic markets oddly the Mainland go along to surpass the US and EU markets, mirroring the divergent form of planetary economic retrieval across parts collect to the addition in the petroleum oil monetary values in January 2011 to US $ 93 per barrel and besides due to the political agitation in Egypt. The plat be emit illustrates how the Asiatic markets have surpassed the US and EU markets over the last quintet old ages.Two-Speed Growth ContinuedBeginning hypertext expatriation protocol //www.hketosydney.gov.hk/cust/HK_Feb_2011.pdfNow allow us see the two different types of pot microscopical and un telescopic.Visible affairVisible Trade refers to the imports and exports of goods, such as oil, machines, nourishing, chemicals and so on. The major states to which Hong Kong exports its goods are Mainland of China, United States, European Union, Japan, Republic of Korea, Taiwan and Singapore. though after the planetary recession in 2009, Hong Kong s exports to these states have alter hygienic wish exports to Mainland in existent footings rose from -6.6 % in 2009 to 20 % in 2010 hitherto the European Union still lagged slow with merely a 6.6 % addition in existent footings in visible(a) exports in 2010 compared to the other major markets who have seen a double-digit addition in exports in the trustworthy twelvemonth. Similarly, the imports of goods in existent footings rose from -9.4 % in 2009 to 18.6 % in 2010. The maintained imports for roughly of the merchandises like consumer goods, groceries, natural stuffs and detonating device goods of Hong Kong climbed signifi evicttly in 2010 compared to 2009 whilst fuels retained imports fell by 9.3 % ( 23.2 % in 2009 13.9 % in 2010 ) . This was chiefly due to the recent rise in the petroleum oil monetary values.The presage on a lower floor shows how seeable imports and exports have fared since 2005.It can be seen that twain imports and exports of goods have increased since 2005 and have been able to excel the planetary recession in 2009.Invisible TradeInvisible Trade refers to the exchange of go, that is, imports and exports of services like fiscal and concern services, travel services, trade-related services and trip services. Exports of services sustained a strong growing through forbidden 2010, jumping by 15.0 % in existent foo tings for the twelvemonth as a whole, assumeing the 0.3 % growing in 2009. Among the major service constituents of Hong Kong, the exports of travel services showed the strongest public presentation thanks to the considerable inflow of visitants from te regional every bit good as long-haul markets. Likewise, exports of trade-related services besides grew aggressively in 2010 benefiting from the improved trading environment in Asia. On the other manus, imports of services experienced a rise up to 10.9 % in existent footings in 2010, in contrast to the 4.9 % muscular contraction in 2009. The imports of services grew solidly in line with improvong the economic conditions.Hong Kong Trade braceAlthough Hong Kong is sing important addition in its exports and imports of both good and services, the seeable trade shortage in 2010 has widened compared to 2009. But this seeable trade shortage was overcomed by the utmost unseeable trade excess therefore assisting the economic system of Hong Kong to give a trade balance excess of $ 104.6 million equivalent to 2.8 % of entire value of imports of goods and services in 2010 compared to merchandise excess of $ 121.3 million stand foring 4 % of the entire value of imports of goods and services in 2009. The figure below depicts Hong Kong trade public presentation over the last five old ages.It can clearly be seen that Hong Kong has been sing seeable trade shortage since 2005 its imports exceeded its exports. However, due to its high invible trade excess over the last five old ages, Hong Kong continues to hold a favorable trade balance which underlines the state s strong external fight.The fiscal SectorThe heavy market concerns over lifting financial shortages and public debts in a few European economic systems have made the stock market more volatile recently. As a consequence, the Hong Kong clam sign sign topographic foreshadow exchange rate moved withing a narrow setting of 7.749 to 7.805 per US dollar in 2010. dis dain a brief weakening around the center of the twelvemonth amid possible capital escapes induced by heightened concerns virtually the European debt crisis, the Hong Kong spot exchange rate showed regenerate strength thenceforth on the backbone of strong have associated with the vivacious sign Public Offerings ( IPOs ) activities. Furthermore, under the Linked commute Rate system, motions in the Hong Kong dollar exchange rates against other currencies closely follow those of the US dollar. In 2010, the US dollar strengthened against the Euro and the British Pound amid concerns about the European debt job but gelded further against most other currencies, in particular the Australian dollar and the Nipponese Yen. Consequently, in December 2010 the trade-weighted Hong Kong dollar Nominal and significant Effective Exchange Rate Indexs declined by 2.2 % and 2.1 % severally from 2009. Hence, Hong Kong dollar emasculated against most major currencies as shown in the figure below f or the twelvemonth 2010.Hong Kong dollar weakened slightly recently in 2010/11In add-on, Hong Kong is a extremely mesmeric market for foreign direct investing. Harmonizing to the UNCTAD fictive activity Investment Report 2010, Hong Kong was the universe s 4th largest FDI receiver, pulling US $ 48 billion in 2009. This marks the offshoot clip that Hong Kong has gained 4th topographic point in the planetary rankings and represents a throttle from its 9th place in 2008. For the 12th serial twelvemonth, Hong Kong continues to be the 2nd largest FDI receiver in Asia, after the Chinese mainland. On the other manus, Hong Kong was the 2nd largest beginning of FDI in Asia, draging Japan, with FDI escapes amounting to US $ 52 billion in 2009. Further, transport to all major economic sectors grew at a alert gait as Hong Kong has a low involvement rate. In other footings, involvement rates on both sweeping and retail foreparts continued to remain at historically low degrees in 2010.The advertize SectorLabour market conditions improved further on a wide forepart as a consequence of the strong weft up of economic activities and substancial occupation creative activity. Entire employment rose to an incomparable high by end-2010, forcing the seasonally familiarised unemployment rate down farther to 4.0 % in the 4th one-fourth of 2010. Underemployment rate excessively dropped to 1.8 % . Labour income continued besides to lift. It is of import to observe that the brisk occupations created were non merely decorous for absorbing the bing umemployed individuals but besides the new entrants joing the labour cart. The line chart below shows the tendency in unemployment rates since 2006.Unemployment rate declined for most in 2010, led by the important upturn in labour demandBeginning hypertext transfer protocol //www.hkeconomy.gov.hk/en/pdf/er_10q4.pdfMonetary valuesInflation force per unit areas in Hong Kong went up bit by bit over the discriminate of 2010 chiefly due to high imported rising prices. Monetary values of nutrient and other trade goods rose strongly in the international markets in 2010 along with the continued planetary economic recovery and the really accommodating pecuniary environment worldwide. For 2010 as a whole, the Composite Consumer equipment casualty Index rose by 2.4 % chase the 0.5 % addition in 2009 when the economic system was in deflation for several months in the twelvemonth. As mentioned antecedently, rising prices was besides caused by imported rising prices. In other footings, import monetary values augmented notably in 2010, due to the strong recoils in planetary trade good monetary values, higher rising prices in add up beginnings and to a lesser extent the sensibly weaker Hong Kong dollar alongside the US dollar accordingly, these increase the imported rising prices in Hong Kong.Inflation in Hong KongBeginning hypertext transfer protocol //www.hketosydney.gov.hk/cust/HK_Feb_2011.pdfKey CCPI stands for Com posite Consumer Price Index( * ) The underlying CCPI has netted out the effects of all relevant one-off travel introduced since 2007, including the release and Government s defrayment of public lodging leases, rates concession, dangling of Employee Retraining Levy, and subsidies for family electricity charges.However, it is critical to direct out that Hong Kong was non the alone state to be sing lifting rising prices on 2010. some Asiatic economic systems with vivacious growing in activities besides saw higher inflationary force per unit areas end-to-end the twelvemonth.