This is the 1735th issue of Hong Kong One Day
Hong Kong's GDP grew by 2.7% in Q1 2024
The Hong Kong Special Administrative Region (HKSAR) Government announced today (17 May) that Hong Kong's gross domestic product (GDP) grew by 2.7% year-on-year in the first quarter, marking the fifth consecutive quarter of growth.
The Economic Adviser to the HKSAR Government, Mr Leung Wing-shing (centre), presents the Economic Report for the First Quarter of 2024 at a press conference. Source: HKSAR Government News Network
The Hong Kong Special Administrative Region (HKSAR) Government today (17 May) released the Economic Report for the first quarter of 2024 and the revised figures for the first quarter of 2024. Hong Kong's economy recorded moderate growth in the first quarter of 2024. Real GDP grew by 2.7% year-on-year, compared with 4.3% in the previous quarter. On a seasonally adjusted quarter-on-quarter basis, real GDP increased by 2.3%.
Exports of services remained an important driver of Hong Kong's economic growth, growing by more than 8% year-on-year. Exports of tourism and transport services, commercial and other services all increased, while private consumption expenditure edged up by 1%, thanks to the continued rebound in visitor arrivals. Leung Wing-sheng, economic adviser to the Hong Kong Special Administrative Region (HKSAR) Government, said on the data on private consumption expenditure that as the level of services and products in the mainland is getting better and better, and the prices are reasonable, it is natural that Hong Kong people will go to the mainland for consumption, which is a structural problem, and it is also a matter of competitiveness, transformation and upgrading, and Hong Kong needs to strengthen its competitiveness.
Taking into account the actual figures in the first quarter and the latest developments in the global and local situation, the forecast for real GDP growth for the whole of 2024 remains unchanged at 2.5% to 3.5% announced in the Budget.
Imports and exports, which had been sluggish, were among the overall exports of goods, which rose by nearly 7% year-on-year in line with the improvement in external demand, among which exports to the mainland soared from a very low base of comparison.
The HKSAR Government looks forward to further economic growth this year, and inbound tourism is expected to recover further as reception capacity continues to recover and the Government is committed to promoting the mega event economy.
The Hong Kong Special Administrative Region (HKSAR) and Peru will sign a free trade agreement (FTA) within this year
The Hong Kong Special Administrative Region (HKSAR) Government issued a press release today (17 May) announcing that the Hong Kong Special Administrative Region (HKSAR) and Peru have substantially completed negotiations on a free trade agreement (FTA) during the APEC Trade Ministers' Meeting, which will be signed within this year.
The Secretary for Commerce and Economic Development of the HKSAR Government, Mr Albert Yau (right), and the Minister of Foreign Trade and Tourism of Peru, Elizabeth Galdo Marín (left).
Secretary for Commerce and Economic Development of the HKSAR Government Yinghua Yau (second from right) and Minister of Foreign Trade and Tourism of Peru Elizabeth Galdo Marín (second from left)
According to the communiqué, the Secretary for Commerce and Economic Development of the Hong Kong Special Administrative Region Government, Yau Yinghua, met with the Minister of Foreign Trade and Tourism of Peru Elizabeth Galdo Marín on May 16 local time during the Asia-Pacific Economic Cooperation (APEC) Trade Ministers' Meeting in Arequipa, Peru, and jointly announced that the negotiations on the Free Trade Agreement between the Hong Kong Special Administrative Region and Peru had been largely completed.
Mr Yau said the negotiations will commence in 2023 and will cover trade in goods, trade in services (including e-commerce), investment and other related areas. "I am glad that we have achieved our goal of concluding a high-quality and comprehensive FTA."
He added that Peru is an important trading partner of the Hong Kong Special Administrative Region (HKSAR) in Latin America, and the FTA will strengthen trade and investment ties between the two sides, provide legal protection and better conditions for Hong Kong goods, Hong Kong companies and investors to enter the Peruvian market, and bring mutual benefits to the economies of both places.
Both sides aspire to formally sign the FTA within this year after completing the remaining work and their respective internal procedures. Details of the agreement will be announced at that time.
In 2023, Peru is the fifth largest goods trading partner of the Hong Kong Special Administrative Region in Latin America, with a total trade in goods between the two places amounting to HK$5,231 million (about RMB29 million). Between 2019 and 2023, trade in goods between the two places will grow at an average annual rate of 4%.
Peru exports a large number of fruit and vegetable products Source: Internet
In terms of merchandise trade, the FTA will benefit both sides by removing or reducing tariffs and reducing non-tariff barriers, making it easier to access both markets.
According to the HKTDC, under the FTA, HKSAR goods will enjoy preferential tariff rates when entering the Peruvian market, allowing them to compete with products from the country's other FTA partners on fairer terms. On the other hand, although domestic exports account for less than 1% of the HKSAR's total exports to Peru, the conclusion and implementation of a FTA between the two places will strengthen and facilitate bilateral trade (including re-exports) and add clarity to merchandise trade between the two places.
Currently, most of Peru's consumer imports come from Asia, including clothing, footwear and household goods. Hong Kong has been an important international sourcing hub for many years, and with a strong supply chain network and a well-established financial services hub, Peruvian companies can identify the right business partners and arrange one-stop sourcing and trade-related services. In fact, some Peruvian companies have set up regional headquarters or offices in the Hong Kong SAR to handle matters such as procurement, financing and supply chain management.
It is expected that under the FTA, Hong Kong's service providers will enjoy better market access commitments, clearer legal protections, and a clearer and more stable business environment, while Hong Kong investors will also enjoy better market access conditions.
It is worth mentioning that the Peruvian government sees digital transformation as an important part of its economic development strategy. In July 2023, Peru introduced a new Law on Artificial Intelligence. However, although the country is still in its infancy in the application of AI and digitalisation, it is developing rapidly and business opportunities are emerging, and Hong Kong companies have a great future in the country.
Hong Kong residents can also open e-CNY wallets with a maximum of RMB2,000 per transaction
The Hong Kong Monetary Authority (HKMA) and the People's Bank of China (PBoC) have expanded the scope of the e-RMB pilot scheme in Hong Kong to facilitate Hong Kong residents to open and use e-RMB wallets and spend money on the Mainland, as well as facilitate connectivity in the Guangdong-Hong Kong-Macao Greater Bay Area.
According to the Hong Kong Monetary Authority, users can open and use a personal e-RMB wallet in Hong Kong with a Hong Kong mobile phone number, which can be used for cross-border payments, but cannot be used for personal transfers. Hong Kong users do not need to open a bank account in the Mainland, but can add value to their wallets through FPS at 17 retail banks in Hong Kong. In addition to the Greater Bay Area, e-RMB can also be used in other pilot areas in the Mainland.
The e-CNY initially covers 17 provinces and cities in the mainland, including several cities in Guangdong, Shanghai, Beijing, Tianjin, etc. Each transaction should be less than RMB 2,000, and the cumulative payment amount should not exceed RMB 5,000 per day and RMB 50,000 per year.
Source: Hong Kong Wenhui Network
Eddie Yue, Chief Executive of the Hong Kong Monetary Authority, said that Hong Kong has become the first cross-border pilot of e-RMB, and the first place outside the mainland where local residents can open e-RMB wallets. The authorities will continue to work closely with the People's Bank of China (PBoC) to gradually expand the scope of application of e-RMB, enrich the e-RMB wallet functions available to Hong Kong residents, and encourage more retail merchants to accept e-RMB, so as to facilitate cross-border retail payments by residents of the two places.
The Deputy Chief Executive of the Hong Kong Monetary Authority, Mr Howard Lee, pointed out that this is not an ordinary e-wallet, which is equivalent to everyone holding RMB cash, which provides Hong Kong residents, especially in cross-border consumption or payment scenes, with a safe, convenient and new payment option.
According to the Hong Kong Monetary Authority, the barcode interoperability between the e-CNY and traditional electronic payments in the mainland is underway, so that Hong Kong residents can have more spending choices in the future.
In addition, the HKMA will work with the Digital Currency Research Institute of the People's Bank of China (PBoC) to explore the possibility of allowing Hong Kong residents to upgrade their e-CNY wallets and promote more payment interoperability through real-name authentication. At the same time, we will also jointly explore the application scenarios of enterprises to facilitate cross-border trade settlement.