The Free Trade Agreement between Hong Kong and the European Free Trade Association (EFTA), of which Norway is a Member State, has been signed on 21 June 2011 in Liechtenstein. The Agreement is Hong Kong's first free trade agreement with the European economies. It covers trade in services, trade in goods (industrial and processed agricultural goods, fish and other marine products), investment, and other trade-related issues such as protection of intellectual property.
Bilateral arrangements on agricultural products between individual EFTA States (including Norway) and Hong Kong as well as a parallel agreement on labour were also concluded in connection with the Agreement.
The Agreement is expected to come into force around mid-2012, subject to the completion of domestic procedures.The conclusion of the Free Trade Agreement represents a major step forward in Norwegian - Hong Kong relations and is expected to increase trade and investment flows between both sides. We therefore encourage members of the Norway - Hong Kong Chamber of Commerce and Norwegian companies to make the best use of this Agreement and tap new opportunities created by this Agreement when it comes into force next year.
For more information about the Agreement, please visit the following website: http://www.tid.gov.hk/english/trade_relations/hkefta/
This exceeded the average annual growth of 4% over the past 10 years, albeit moderated from the exceptionally strong growth of 7.5% in the first quarter.
On a seasonally adjusted quarter-to-quarter comparison, the Gross Domestic Product declined 0.5% in real terms in the second quarter, mainly reflecting the drag from merchandise trade and a very high base of comparison in the first quarter.
Speaking at a press conference today, Acting Government Economist Andrew Au said exports of goods slowed in the second quarter to show virtually little change in real terms over a year earlier.
While this was partly attributable to the temporary disruptions to regional supply chains after Japan's twin disasters, the slower growth in demand in many export markets was also relevant. Nevertheless, the Asian markets continued to outperform the developed markets.
Services exports held up well in the second quarter, growing 7.8% in real terms over a year earlier. Travel services exports and financial and other business services provided the main impetus, on the back of vibrant inbound tourism and active cross-border financing, fund-raising and other commercial activities. Yet exports of trade-related services and transportation services showed more moderate growth, along with the slowdown in regional trade flows.
Domestic demand strengthened in the second quarter, becoming the key driver of overall economic growth. Private consumption spending grew 9.2% in real terms over a year earlier, thanks to sanguine consumer sentiment and improving income conditions. Overall investment spending increased 8.1%, bolstered by the continued expansion in public building and construction works, and a rebound in private machinery and equipment acquisition.
The job-creation pace accelerated in tandem with the sustained economic upturn, pushing total employment to an all-time high and absorbing most of the increase in labour force. The seasonally adjusted unemployment rate stood at a low level of 3.5%.
Thanks to a relatively tight labour market, wages and earnings rose further. The median household income rose 9.6% in the second quarter in nominal terms over a year earlier, or 4.2% in real terms after discounting inflation. Over the same period, average employment earnings for the lowest decile of full-time employees also posted an increase of about 10% in nominal terms or 4.3% in real terms.
The local stock market drifted lower during the second quarter, due to heightened uncertainties in the external environment. Residential flat prices rose during the quarter, but property trading turned quieter amid more stringent mortgage loan terms and further Government measures to stabilise the housing market.
Mr Au said the level of uncertainty in the external environment has been increasing since the beginning of the year. The fragile economic recovery, the US fiscal positions and the lingering sovereign debt problem in the eurozone remain the key sources of downside risks to the global economy.
The austerity measures advanced economies are implementing to redress their fiscal weakness may also weigh on their growth momentum in the coming period. Nevertheless, the dampening effects of the Japan incident on regional trade flows are expected to gradually fade.
The Asian and emerging market economies as a whole should continue to outperform the advanced economies, notwithstanding their need to tighten policy to rein in inflation. These latter two factors should continue to provide support to Hong Kong’s trade performance for the rest of the year.
He said the domestic sector is expected to stay resilient. Local consumer spending will be underpinned by the improving income and employment conditions. The results of the latest quarterly business tendency survey also showed large enterprises have remained positive on the near-term business outlook. The sustained high level of public sector construction works should render additional support to domestic demand.
Given the strong outturn of a 6.3% year-on-year real Gross Domestic Product growth in the first half of the year, barring any abrupt external shocks and even allowing for some moderation in growth in the second half of the year, the economy should be on track to achieve the growth forecast as announced in May.
Mr Au said the forecast Gross Domestic Product growth for 2011 as a whole is maintained at 5-6% in the current round.
As part of a global phenomenon, inflationary pressures increased during the second quarter. Underlying consumer price inflation, which nets out the effects of the Government’s relief measures to reflect the inflation trend more accurately, rose to 5% in the second quarter from 3.7% in the first quarter. Higher food prices and private housing rentals remained the key contributory factors.
Although global food and commodity prices have shown signs of stabilisation in recent months, they are still markedly higher than year-ago levels. Moreover, given rising inflation in import sources, Hong Kong will continue to experience elevated price pressure from the external front in the near term.
Locally, the feed-through of higher private residential rentals to the consumer price indices will also continue in the coming months. The sustained economic upturn and the one-off effect from the implementation of statutory minimum wage will also exert upward pressures on domestic costs.
Against this background, inflation is likely to climb up further in the coming months before peaking out. The inflation forecast for 2011 as a whole announced in May has already factored in the above developments and the consumer price trend has so far been largely in line with expectations. As such, the forecast rates of headline and underlying consumer price inflation for 2011 as a whole are kept unchanged at 5.4% and 5.5%.
Click here for the Half-yearly Economic Report 2011.
There are three categories of projects in the scheme. The first covers projects to be funded by the Innovation & Technology Fund. The second covers projects to be funded by Mainland authorities. The third covers projects to be funded jointly by Guangdong and Hong Kong authorities, or Shenzhen and Hong Kong authorities.
There are 23 technology areas under the first category, for which Hong Kong institutions can submit funding applications. The governments of the two sides will also jointly provide funding support for projects in 10 technology areas under the third category. The technology areas supported under the scheme are relevant to the needs of industry and will enhance economic development in the Greater Pearl River Delta region.
Application details can be found on the Innovation & Technology Fund website.
On behalf of TDC, I would like to express our deepest condolences, we are much saddened by the tragic event in Norway. It is inconceivable that such an incident could happen in a peaceful country like Norway. How are things progressing? I think it may take quite some time before people’s emotion could calm down and cope with it. But I am sure your country will be even more united after this horrible occurrence.
Hong Kong TDC