Exporters to face challenges in 2008

12 Jan '08

4 min read

Hong Kong's industrial sector will face severe challenges in 2008, said Clement Chen, chairman of the Federation of Hong Kong Industries, at a press conference held (Thursday) to review the economic performance of Hong Kong in 2007 and forecast what the new year has in store.

He is worried if no immediate remedial measures are taken, Hong Kong export growth as well as other sectors of the local economy will be adversely affected.

“As we expect the sector will be impeded by a number of external uncertainties, we have taken a more prudent approach in this year's economic outlook.

Hong Kong is a small and open economy which is highly affected by the external economic environment. According to a recent OECD report, the economic growth of 30 OECD member countries in 2008 is forecast to stand at 2.3%.

In view of this, we anticipate the growth of Hong Kong export this year will slow down slightly,” Mr Chen said.

The surge in production costs is another increased burden of Hong Kong manufacturers. These include rise in costs of energy, raw materials and labour, coupled with the appreciation of Renminbi.

At the same time, China-made products are facing hardship caused by the upsurge of protectionism in overseas markets. Hong Kong companies with products made in China are likewise affected.

Moreover, the recent recall incidents of China-made products (in particular China-made toys) in overseas markets is posing another challenge to Hong Kong exporters.

Mr Chen pointed out that given the close economic relationship between Hong Kong and the Mainland, changes of policies implemented by the Central Government has significant impacts on Hong Kong.

Since the second half of 2006, the Central Government has started a number of processing trade policy changes, and announced several lists of restricted and prohibited category for processing trade activities.