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Chief Executive Mr Donald Tsang made a three-day official visit to New Zealand from 9 to 12 September, after attending the 15th summit of leaders of the Asia-Pacific Economic Co-operation forum in Sydney.
The Chief Executive’s official programme in Wellington began with a visit to and a traditional Maori welcome at Te Papa Museum, and a luncheon hosted by the Asia New Zealand Foundation, followed by bilateral meetings with Prime Minister Rt Hon Helen Clark and Deputy Prime Minster and Minister of Finance Dr Michael Cullen. During the bilateral discussions, the Prime Minister told the Chief Executive that New Zealanders would like to see more Hong Kong investment in areas other than the traditional focus on property, such as high technology, biotechnology, renewable energy, and movie production and services. Mr Tsang said that New Zealand is a role model for Hong Kong in areas such as renewable energy and environmental conservation.
On Tuesday 11 September, the Chief Executive and the delegation headed to Auckland to attend an event organised by the Hong Kong Tourism Board promoting the Equestrian Olympic events in Hong Kong next year. He gave a keynote address at a Gala Dinner hosted by the Hong Kong Economic & Trade Office (Sydney), where the Chief Executive updated New Zealand business leaders, think tanks and the media on Hong Kong's latest developments.
The Chief Executive also visited a leading health care services company, a state-of-the-art sewage treatment facility and the Villa Maria vineyard.
Consul-General Mr Julian Ludbrook and New Zealand Trade and Enterprise (NZTE) co-hosted a reception on 14 August to welcome New Zealand student ambassadors who had just returned to Hong Kong after their stay in New Zealand under the New Zealand Student Ambassador Selection Programme.
The guest of honour was the Secretary for Education Mr Michael Suen, who was accompanied by Deputy Secretary for Education Mrs Betty Ip. Also in attendance were representatives from sponsors and the local press.
At the reception, the students shared their experiences in New Zealand with the guests and with journalists in a media question-and-answer session.
The programme is a NZTE initiative aimed at encouraging Hong Kong secondary school students to take up the educational, work and travel opportunities that New Zealand has to offer. It is jointly organised by New Zealand Trade and Enterprise, in association with Immigration New Zealand and Hong Kong Education & Manpower Bureau (School-business Partnership Programme) and co-organised by Longman Hong Kong Education, Wing On Travel, Air New Zealand and other companies and organisations.
The Hong Kong Government released a Green Paper on Constitutional Development on 11 July consulting the public on the options, roadmap and timetable for implementing universal suffrage for the Chief Executive (CE) and the Legislative Council (LegCo) elections. The paper was prepared on the basis of discussions by the Commission on Strategic Development and within the community. It summarises what are seen as the key issues, as well as the 323 submissions received during a 20-month period.
At the official launch of the Green Paper, Chief Secretary for Administration Mr Henry Tang pledged that the Government would eventually shape a "mainstream model” and that, at this stage, the Government “has not formed any specific views on the way forward or ruled out any options”. He said that the paper's approach offered more scope for "liberal" discussion at this stage, and public opinions would be a reference point for the Government, not the determining factor.
The consultation paper sets out more than 40 questions on the methods for electing the CE and legislators, and presents three types of options on the models, roadmap and timetable for achieving the goal, with a pick-and-mix approach to resolving some of the issues. Members of the public are invited to choose their preferred combination of options in six categories. The public consultation will run until 10 October.
The Green Paper on Constitutional Development at a glance:
Read the Green Paper on Constitutional Development [external link to Hong Kong Government] .
The Chief Executive (CE) called the Green Paper “a significant milestone” in Hong Kong’s constitutional development. He hoped that a mainstream option will emerge which can secure two-thirds majority support in LegCo and, with the consent of the CE, stand a good chance of being accepted by the Central Government in accordance with the Basic Law. The CE’s statement on the Green Paper is available at Hong Kong Government News website.
On models for electing the CE by universal suffrage, Secretary for Constitutional and Mainland Affairs Mr Stephen Lam suggested the public first consider the composition and size of the nominating committee, before exploring the nomination and selection methods. On the possibility of any pre-screening of possible candidates in future CE elections, he said that there was no need to be overly concerned with the matter for now.
Chief Secretary for Administration Mr Henry Tang later affirmed in LegCo that retaining functional constituencies would comply with the Basic Law.
Hong Kong’s economy expanded briskly in the second quarter of 2007, with GDP accelerating to a 6.9% growth in real terms yoy, above a forecast of 6.1% and up from a revised 5.7% in the first quarter.
Driven by domestic demand as consumer spending was boosted by rising wages and a tight labour market, the economic upturn continued to be broad-based and distinctly above trend. Externally, merchandise exports sustained a quarter of strong performance, growing by 11.3% yoy in the second quarter. Domestically, private consumption expenditure rose markedly further by 6.6%, supported by rising income, better job prospects and improved financial positions of households. Overall investment spending picked up to a strong 11.1% growth. The labour market improved further in the second quarter, with the seasonally adjusted unemployment rate edging down to 4.2%, the lowest since mid-1998 (See Diagram A).
The second quarter results represented the economy's best performance since the third quarter of 2006 (see Diagram B) and the Government lifted its 2007 growth forecast from 4.5-5.5% to 5-6%, which already takes into account a possible slight slowdown in the economy in the second half of this year. The Government maintained its forecast of a 1.5% increase in the Composite CPI this year.
The Bauhinia Foundation Research Centre published proposals for making Hong Kong and Shenzhen a single "world-class" metropolis of an area of 3,200 sq km with 20 million residents. One of its ten proposals suggests that the two million Shenzhen permanent residents be given multiple-entry smart cards allowing them to visit Hong Kong. Other proposals include building a high-speed rail link between the cities' airports, creating a jointly run development zone on a one sq km no-man's land beside the Shenzhen River, and co-operating to foster innovation and nurture talent. The executive summary of the report is available at www.bauhinia.org/hongkongshenzhen.htm.
Responding to concerns over the proposals, Bauhinia Foundation Research Centre Chairman Mr Anthony Wu said that he did not feel the "one country, two systems" formula would be affected. A consultant for the study added that the two cities would not be assimilated, and emphasised that the idea of building a greater metropolis would not involve any policy changes.
Speaking at the second Hong Kong-Shenzhen Co-operation Forum, Acting Chief Executive Mr Henry Tang remained realistic about possible challenges, since this proposed partnership would come under `one country, two systems' - two neighbouring cities with two different customs duty zones.
At the same forum, Shenzhen Mayor Mr Xu Zongheng said that a Hong Kong-Shenzhen partnership would be an "economic dream team" which could become a world-class metropolis in 15 years. He suggested that a stronger rail and airport connection, smoother customs procedures at border crossings, and better people and information flow would be needed. Press releases on the proposals and the forum are available at the following links:
It was announced that the by-election for the Legislative Council seat for Hong Kong Island left vacant by the death of Mr Ma Lik will be held on 2 December 2007, with the nomination period opening in mid-October.
Former Chief Secretary Mrs Anson Chan announced on 11 September that she would contest the by-election. Mrs Chan said that she decided to stand to promote universal suffrage in 2012 and to encourage good governance.
Former Secretary for Security Mrs Regina Ip has also officially announced that she would also contest the by-election as well.
Hong Kong enjoys the highest living standards in the Asia-Pacific region, but it is also the second costliest place to live, according to a survey entitled "International Comparison Program in Asia and the Pacific: Purchasing Power Parity Preliminary Report" by the Asian Development Bank for a global statistical project established on the recommendation of the United Nations Statistical Commission. The survey measures the "actual final consumption of households" in 23 Asian economies to determine their economic wellbeing and living standards and includes items purchased directly by households and those supplied for individual use by the government, including education and health.
Hong Kong topped the list among five economies that were significantly wealthier than others in the region, with household consumption expenditure topping the list at HK$125,303 per capita, followed by Taipei at HK$109,108 and Singapore at HK$99,70. Brunei and Macao took the fourth and fifth slots, respectively.
However, based on real GDP, Hong Kong ranked fourth with HK$202,941 per capita and Taipei fifth with HK$147,971 per capita. Brunei, at HK$269,581 per capita, topped the list, followed by Singapore at HK$236,336 and Macao at HK$212,617.
Veteran unionist legislator and Vice-Chairman of the Democratic Alliance for Betterment and Progress of HK (DAB) Mr Tam Yiu- chung was elected new Chairman of the political party, succeeding legislator Mr Ma Lik, who passed away at age 55 in Guangzhou on 8 August. Mr Tam will not serve the full two-year term but will serve until April 2009.
Mr Tam first became a legislator representing the labour functional constituency in 1985, and was later appointed as a member of the Executive Council in October 1997 by former Chief Executive Tung Chee Hwa, a post he held for five years. Mr Tam has been DAB’s Vice-Chairman since 2002. At present, he is also a Vice-President of the Hong Kong Federation of Trade Unions and a local deputy to the National Committee of the Chinese People's Political Consultative Conference.
Macao's GDP in the second quarter of 2007 surged by 31.9% to 31.6 billion patacas (US$4.05 billion) on the back of booming casinos, bringing first-half GDP growth to 28.9%. Despite the small size of its economy, Macao’s nominal per capita GDP growth in monetary value in 2006 was HK$228,000, outperforming Hong Kong’s HK$215,000.
Spurred by several large construction projects, investment in the second quarter soared 44.4%. Private investment rose 49.9% also mainly because of a 56.7% rise in construction investment, whereas government investment dropped by 20%. Total gross gaming revenues of 26 casinos in Macao rose 50% yoy to a record 19.57 billion patacas (US$2.51 billion) in the second quarter of this year. Exports of goods fell 5.9 per cent, and private consumption rose 8.4%, lagging far behind the GDP growth. Some local economists suggested that the gap reflected a limited increase in local people's purchasing power due to uneven distribution of wealth.
Chief Executive Mr Ho Hau-wah said that the Government did not want Macao’s economy to be overheated, and that in October it would put forward assistance measures to help disadvantaged and low-income families whose lives might be affected by rising inflation.
With the opening of the world's largest casino resort the Venetian Macao boosting the gaming market, economists forecast that the city's full-year GDP growth may hit a 10-year high. Government Economist Mr Lao Pun-lap forecast that the 2007 full-year GDP growth could exceed 20%.
Hong Kong’s population rose to 6,921,700 in mid-2007, up 0.9% yoy. Some 69% of the overall population increase came from an influx of 44,700 one-way permit holders. The population is expected to increase to 8.57 million in mid-2036, at an average annual growth rate of 0.7%, and it is forecast that nearly 27% of the population will be aged 65 and over by 2033. Gender imbalance will get worse, as the number of males is forecast to fall from last year's 912 per 1,000 females to 709 per 1,000 females by 2036. The press release on the report is available at www.info.gov.hk/gia/general/200707/16/P200707160187.htm.
Fitch Ratings forecasts Hong Kong’s current account surplus at about 10.6% of GDP for 2007 and a fiscal surplus of 2.1% of GDP in the year to 31 March, 2008. It also predicts government debt to fall to 1.1% of GDP while fiscal reserves will remain near 25% of GDP. The rating agency said that Hong Kong, a decade after its return to China, has set aside many of the "potential political risks" identified in the beginning, but noted that economic and credit risks posed by China continue to weigh on Hong Kong’s ratings.
Hong Kong’s overall crime rate for the first half of the year has risen by 2.3% yoy to 40,357 cases due to a surge in domestic violence and drug seizure. There was a drop of violent cases including robbery (down 25.2%) and homicide (down 50%).
China’s State Administration of Foreign Exchange (SAFE) announced on 20 August that mainland residents will be permitted for the first time to invest directly in Hong Kong-listed securities under a pilot programme to be launched in Tianjin.
Moody's Investors Service upgraded Hong Kong’s long-term foreign-currency and local-currency sovereign ratings to "Aa2" from "Aa3", with "Stable" outlook, attributing the decision to a strengthening of Hong Kong Government finances (with almost no debt and with large and growing fiscal reserves, equivalent to about 1/4 of GDP) and its external position, which gives it considerable financial flexibility and provides a strong buffer against potential shocks emanating from the Mainland or elsewhere.
Fitch Ratings also upgraded Hong Kong’s long-term foreign-currency sovereign rating to "AA" from "AA-", with "Stable" outlook. Fitch attributed the upgrade to the city’s strong external financial position, improving public finances, high level of fiscal reserves and a credible linked exchange rate system. Fitch also accepted that many of the potential political risks identified in the early years of Chinese sovereignty over Hong Kong could presently be set aside. However, the agency said that Hong Kong’s narrow tax base, volatile non-tax revenues and overall fiscal balance continue to be the city's weakness.
The US$2.4 billion Venetian Macao, the world’s largest casino resort by floor space and number of tables built by Las Vegas Sands on Cotai Strip, opened with 850 gaming tables and 4,100 slot machines in August. The complex features a hotel tower with 3,000 five-star hotel suites and a convention centre with 111,000 sq m of floor space, a 15,000-seat stadium and a baroque-themed shopping plaza with 350 stores.
By introducing convention and shopping facilities, the new resort Venetian Macao will attempt to tap new markets for Macao and extend the amount of time visitors spend in tow. Retail sales in the city last year totalled 10.66 billion patacas, compared with Hong Kong’s HK$219.57 billion.
Las Vegas Sands Chairman Mr Sheldon Adelson forecasts that Macao's booming casino industry is expected to overtake the gaming revenue of the US state of Nevada as early as next year.
Over 12.6 million people visited Macao in the first six months of the year, a yoy increase of 21.3%, and some 6.9 million of the visitors were from mainland China, up 18.5% yoy.
Moody's Investors Service upgraded Macao’s foreign and local currency govt issuer ratings to "Aa3" from "A1", citing the Government's solid finances and its position as a large net creditor externally. The outlook for all the ratings is stable. The agency said that, unless there is a major shock emanating from China, Macao should be able to continue to build up foreign assets. However, it warned that the lack of diversity in the sources of both government revenue and current account receipts prevents Macao's ratings from moving up too swiftly.
| Period | NZ Total Exports to HK (FOB NZ$m) | % of market share | yoy change |
|---|---|---|---|
| August 2006-July 2007 | 572 |
1.65 |
+3.7% |
| June 2007 | 53 |
-5.5% |
|
| July 2007 | 54 |
-9.7% |
Indicator |
Figure |
Period |
Change |
|---|---|---|---|
| 1. Gross Domestic Product | US$188.8 bn | 2006 | +6.8% yoy |
| 2. Economic growth | +6.9% | 2nd Q 2007 preliminary | |
| 3. Economic growth forecast | +5 to 6% | FY2007 revised forecast | |
| 4. Population | 6.922 million | mid-2007 | +0.9% yoy |
| 5. Fiscal deficit | HK$41 m | July 2007 | |
| 6. Foreign currency reserves | US$138.3 bn | Aug 2007 | +7.3% yoy |
| 7. Monetary base | HK$297 bn | July 2007 | +2.4% yoy |
| 8. Hang Seng Index | 23 945 | 31 Aug 2007 | +37.9% |
| 9. Inflation rate | +1.5% yoy | July 2007 | |
| 10. Prime interest rate | 6.75% | Aug 2007 | |
| 11a. Property transactions: sales value | HK$36.8 bn | Aug 2007 | +74.7% yoy |
| 11b. Property transactions: no of transactions | 11 480 | Aug 2007 | +63.3% yoy |
| 12. Retail sales value | HK$21.3 bn | July 2007 | +14.2% yoy |
| 13. Unemployment rate | 4.2% | June-Aug 2007 (provisional) | |
| 14a. Total exports | HK$238.5 bn | July 2007 | +8.6% yoy |
| 14b. Total imports | HK$246.7 bn | July 2007 | +9.8% yoy |
| 14c. Total re-exports | HK$228.1 bn | July 2007 | +10.9% yoy |
| 15. Visitor arrivals | 2.45 m | July 2007 | +12.3% yoy |
(Sources: 1, 2, 3, 4, 8, 11, 12, 13. Hong Kong Census & Statistics Department 5,6,7. Hong Kong Monetary Authority 9. HSBC 10. Hong Kong Land Registry 14. Hong Kong Tourism Board)
Hong Kong-New Zealand Business Association Inc
Postal Address: P O Box 105-009, Central Auckland, New Zealand
Tel: +64 (9) 443 3337
Fax: +64 (9) 443 3331
Email: hknzba@clear.net.nz
Website: hknzba.bizweb.co.nz
New Zealand Chamber of Commerce in Hong Kong
New Zealand Focus
2/F, Island Building,
439-445 Hennessy Road, Causeway Bay,
Hong Kong
Tel: +(852) 2536 4469
Fax: +(852) 2810 9068
Contact: The Executive Officer
Email: exec@nzcchk.com
Website: New Zealand Chamber of Commerce in Hong Kong
New Zealand Society of Hong Kong
GPO Box 8817, Hong Kong
Tel: +(852) 6114 5583
Contact: The Membership Officer
Email: members@nzshk.org
Website: New Zealand Society of Hong Kong
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