After more than six years of recession caused by the property market crash following Hong Kong’s accession to China, the Hong Kong economy is bouncing back powered by a booming Chinese mainland coupled with growth in the domestic consumption.
In the year 1997, two important events took place in Hong Kong. The first major event was Hong Kong’s accession to China from Britain. Hong Kong got a new identity as Hong Kong Special Administrative Region (SAR) under the One-Economy- Two-Systems policy that promised full autonomy to the region. And second, the property market collapse that sent the Hong Kong economy into a recession. Though the beginning of the new millennium saw its economy bounce back and clock a GDP growth of 14.5% in the first quarter of 2000, due to growth in intra-regional trade, however, it proved to be a short blip and could not be sustained thereafter as the growth in the next three quarters declined steadily. The following year saw the economy record a near zero growth rate due to global economic slowdown. In 2002, the economy recovered slightly to record a GDP growth rate of 2.3%, but just as it was getting back on track the spread of Severe Acute Respiratory Syndrome or SARS in early 2003 brought down the growth rate from 4.5% in the first quarter to 0.5% in the second quarter.
Things began to look up from the latter half of 2003. Driven by a strong trade growth with the Chinese mainland, the Hong Kong economy was on the comeback trail with the overall growth rate for the year pegged at 3.3%. And it has not looked back since then. Besides the trade with the mainland, several other factors too have contributed to the revival of the Hong Kong economy. |
