Hong Kong s long-term outlook remains reasonably bright. While a developed economy, increased cooperation between Hong Kong and China offers a unique opportunity for the Special administrat ive region to benefit from the M ainland to further drive economic growth. ...However, Hong Kong needs to maintain its competitive edge or risk being overshadowed by fast-rising Chinese cities. taBle: lonG-terM MacroeconoMic forecasts -- chapter -: Business environment -- sWot analysis -- BMi Business environment risk ratings -- Business environment outlook -- institutions -- taBle: BMi Business and oPeration risK ratinGs -- taBle: BMI leGal FraMeWOrK ratING -- infrastructure -- taBle: laBour force Quality -- taBle: aSIa � aNNUal FDI INFlOWS -- Market orientation -- taBle: trade and inVestMent ratinGs -- taBle: toP exPort destinations -- operational risk -- chapter -: Key sectors -- Freight -- taBle: air freiGHt, --------- -- taBle: MaritiMe freiGHt, -- taBle: INlaND WaterWaY FreIGHt, --------- -- taBle: rail freiGHt, --------- -- taBle: road freiGHt, --------- -- tourism -- taBle: inBound arriVals, --------- -- taBle: outBound tourisM, --------- -- other Key sectors -- taBle: PHarMa sector Key indicators -- taBle: telecoMs sector Key indicators -- taBle: infrastructure sector Key indicators -- taBle: food and drinK sector Key -- taBle: autos sector Key indicators -- chapter -: BMi Global assumptions -- Global outlook -- chinese economy under taBle: GloBal -- taBle: DevelOPeD StateS, real GDP GrOWtH, -- taBle: BMI verSUS BlOOMBerG CONSeNSUS real GDP GrOWtH FOreCaStS, -- taBle: eMerGING MarKetS, real GDP GrOWtH, -- - Business Monitor International Ltd www hong kong Q- ---- core Views the Hong Kong economy narrowly eclipsed our expectations for -.- growth in ----, notching a -.- full-year expansion on the back of -.- year-on-year growth in Q---. Nevertheless, we remain decidedly below consensus (-.- ) with our ---- real GDP forecast of -.- , with expectations for the ongoing slowdown in China as well as the nascent correction in the Hong Kong property market to take a toll on broader economic activity. ...Should the ongoing economic slowdown in China hit crisis levels, Hong Kong would not be unscathed, and real GDP growth would likely fall short of even our below consensus forecast. - Business Monitor International Ltd www executive summary
...While this will likely have little effect on Hong Kong s investment or economic outlook, it could nevertheless undermine the city-state s social stability, and we will be closely monitoring the process as such. taBle: POlItICal OvervIeW - Long-term political outlook - Benign outlook Despite Democratic reform uncertainty While we believe Hong Kong will remain at or near the top of our political risk ratings table over the next decade, a number of risks could lead to rising political instability. the sluggish pace of democratic reforms will continue to cause anger among pro-democracy supporters, and there is the potential for large-scale public protests. a lack of affordable housing and rising income inequality also could pose threats to social stability. ...Given the government s proactive efforts to maintain a solid fiscal trajectory, we believe that Hong Kong will run a small surplus averaging -.- of GDP over the next -- years.
...Source: BMI appears to have worked well since ----, and despite growing calls from within Hong Kong to be given more political autonomy, we continue to see the current one country, two systems framework remaining in place over our ---year forecast period. The Basic Law was outlined by Beijing to cover the years from ---- to ----, during which the capitalist system and way of life would remain unchanged and the socialist system and policies would not be practised. ...
