Ordinary Gweilo

From the BBC:

Hong Kong economy’s record rise

Hong Kong’s towering skyline is testament to its economic might

The Hong Kong economy has rebounded at a record pace since the Sars outbreak.

Aided by a surge in returning tourists, gross domestic product (GDP) rose by 6.4% in the third quarter of 2003.

This is the biggest rise Hong Kong has seen since the Special Administrative Region first began official economic growth records in 1990.

The GDP increase, which followed after a 3.7% post-Sars second quarter fall, was greatly assisted by China relaxing border restrictions with the mainland.

Since records began in 1990? What’s that all about? Anyway, the BBC goes on to say that Hong Kong is increasingly reliant on tourism. I rather doubt that. The SCMP has a chart showing that exports and re-exports of goods had grown strongly (though not quite as much as a year earlier), and Hong Kong continues to benefit from the strength of the PRC economy. What has changed recently is that domestic consumption has increased, and although tourism also helps in that regard it can’t be what is driving the economy.

It’s now clear that the effect of SARS was more short-term and less dramatic than it may have seemed at the time, which makes it all the more ridiculous that the government poured so much money into Harbour Fest etc. People who stayed away from Hong Kong earlier this year were always likely to come back as soon as the situation changed, and didn’t need any prompting from the government.

Property prices have strengthened in the last few weeks, and the number of new mortgages approved last month increased 40% compared to a year earlier. That will be from a low base, but property prices are important as far as confidence is concerned and if the trend continues then it will undoubtedly boost domestic consumption.

It’s looking good!