HK Budget to boost economic recovery

John Tsang has proposed measures aimed at building on Hong Kong’s economic recovery from the global financial crisis. Also, he unveiled initiatives aimed to stabilise the property market, develop 6 priority industries and foster a caring society.

Presenting his annual Budget in the Legislative Council on February 24, Tsang highlighted the jurisdiction’s strong rebound from the global financial turmoil. The Financial Secretary said that, after 4 quarters of negative growth, Hong Kong’s GDP expanded by 2.6% in the 4th quarter of 2009. Tsang forecast GDP growth of 4-5% for 2010. He also forecast a USD 13.8 billion surplus for 2009-2010.

Hong Kong’s Financial Secretary said: "While we have come through the most difficult period of the financial tsunami, the external environment is still fraught with uncertainties and the foundations of the recovery are not yet firm". He also added: "I am also concerned that some people have yet to benefit from the economic recovery. Therefore, through this Budget, I will strive to achieve the three objectives of consolidating the recovery, developing our economy and building a caring society."

Filed under: HK as a Financial Centre

HK produces Exchange of Information Rules

The government of Hong Kong has submitted the Inland Revenue (Disclosure of Information) Rules to the Legislative Council (Legco).

The new rules will enable the jurisdiction to adopt the internationally-agreed Organization for Economic Cooperation and Development (OECD) standard for the exchange of information (EoI) for tax purposes in double taxation agreements (DTAs).

The Hong Kong government has produced the EoI rules following the passing in January by Legco of the Inland Revenue (Amendment) (No 3) Bill 2009.

In accordance with the new rules, the Inland Revenue Department (IRD) is required to notify a subject person before any that person-related information is disclosed. The rules provide that the person may request a copy of the information and the IRD to amend any information that he/she considers to be factually incorrect.

The rules are subject to the approval of the Legco.

Filed under: HK Law changes

HK to strengthen financial ties with Brunei

The director of the Hong Kong Economic and Trade Office in Singapore, Subrina Chow, has said that Hong Kong is intending to develop closer financial ties with Brunei. She said that the jurisdiction is particularly interested in the field of Islamic finance products.

According to the government of Hong Kong, there is an excellent opportunity of developing closer financial and other economic ties between the two countries.

In March, Hong Kong’s Financial Secretary, John Tsang Chun-Wah will be visiting Brunei in order to discuss these issues.

It should be noted that, in the past, Hong Kong has developed financial ties with Singapore, Malaysia and Thailand. So, now it is looking further in the Asian region to develop ties with Brunei as well as Indonesia and Vietnam.

Filed under: International Business Environment

Hong Kong released Offshore Trade Statistics for 2008

On February 9, 2010, the Census and Statistics Department (C&SD) released the statistics on Hong Kong’s exports of services that are related to offshore trade for 2008, with breakdowns by type of service and destination.

According to the statistics for 2008, exports of services that re related to offshore trade constituted 94.5% of the value of exports of "merchanting and other trade-related services". Also, this is 28.4% of the value of total exports of services of Hong Kong in 2008.

As to Hong Kong’s earnings from offshore trade, in 2008, the jurisdiction earned $204.1 billion, which is up by 9.7% over 2007.  Within this total, the gross margin from "merchanting" was $176.5 billion, and the commission from "merchandising for offshore transactions" was $27.6 billion.

It should be noted that offshore trade covers the services of "merchanting" and "merchandising for offshore transactions" provided by establishments that operate in Hong Kong (excluding their affiliates located outside Hong Kong), while earnings from offshore trade include gross margin from "merchanting" and commission from "merchandising for offshore transactions".

Analysed by destination of exports of services relating to offshore trade, the US and the mainland of China were the two major destinations in terms of offshore trade earnings, as they accounted for 26.3% and 24.7% respectively of the gross margin/commission earned in 2008. The US and China were followed by the UK (6.3%), Germany (6.1%) and Japan (5.0%).

Filed under: Offshore Companies

Value of 5 major domestic exports decreases

As compared with the year before, the value of domestic exports that are classified in the 5 major industries decreased in 2009.

According to the figures released by the Census & Statistics Department on February 4, the most significant fall was recorded in the apparel industry, which has fallen 79.9% to $4.5 billion.

The basic metals sector showed a drop of 50% to $3.8 billion.

The Census & Statistics Department said that paper and paper products, and printing and reproduction of recorded media decreased 21.9% to $3.6 billion.
A drop of 17.3% to $13.7 billion was experienced by computer, electronic and optical products, while the chemicals and chemical products industry declined by 13.8% to $7.5 billion.

It should be noted that the 5 above-mentioned major industries together accounted for 59% of total domestic exports of Hong Kong.

Filed under: Business and Economy

Retail sales value in HK grows 16%

According to the Census & Statistics Department, the total retail sales value for December has been provisionally estimated to be USD 29.4 billion, which is up 16% on the same month last year.

The sales volume of jewellery, watches and clocks, and valuable gifts have seen the highest increase of 30.4%. They were followed by the sales of motor vehicles and parts, which rose 29.8%. The sales of electrical goods and photographic equipment increased by 23%, while apparel by 9.6%, and commodities in department stores by 9.3%.

For the year 2009, total retail sales increased by 0.6%, as compared with 2008.

Filed under: Business and Economy