Emerging markets to lead rebound: HSBC
Updated: 2009-10-07 06:38
By Joey Kwok(HK Edition)
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HONG KONG: Though slowed by the global economic recession, Hong Kong's economy has been gaining momentum to rebound, benefiting from the growth in new export orders on the mainland, HSBC said yesterday.
Qu Hongbin, China chief economist at HSBC, said new orders on the mainland have been growing strongly in the third quarter, which supports the country's drive to achieve a sustainable economic recovery in the rest of the year.
"If export orders on the mainland pick up, Hong Kong is going to benefit from it as well," Qu told reporters in Hong Kong yesterday.
He expects the gross domestic product (GDP) on the mainland to grow 8.1 percent and 9.5 percent in 2009 and 2010, respectively, while the city's GDP is expected to achieve 3.8 percent growth next year, after shrinking 4 percent in 2009.
Like Qu, Financial Secretary John Tsang earlier said that the local economy may soon "see the dawn of economic recovery", as the city's GDP is expected to stop contracting in the second quarter.
Indicative of these higher hopes for Hong Kong, HSBC recently moved its chief executive to Hong Kong to inaugurate its shift of business focus to emerging Asia. As for global emerging markets, HSBC has duly noted that these markets, including the mainland, Brazil, Russia, India and South Korea, recorded this year's strongest quarterly growth in manufacturing and service output in the third quarter.
"Mainland China, closely followed by India, saw the fastest growth in new orders in manufacturing and services in the third quarter. Both economies also led services sector expansion and are confident about demand in the fourth quarter," Peter Wong, HSBC's executive director for Hong Kong and Mainland China said yesterday.
Wong added that the economic shift from west to east is accelerating, as foreign direct investment inflows into the mainland are likely to climb higher than those of the developed markets in the near term.
HSBC expects emerging nations to witness economic growth of 6 percent in 2010, while the developed world will expand by only 1.8 percent. The global banking giant also forecasts that emerging markets will lead the global economic recovery in the foreseeable future.
The HSBC Emerging Markets Index, a composite indicator tracking the changes in business conditions among the emerging markets, has surged to 55.3 in the third quarter from 50.7 in the second quarter.
The index has rebounded sharply from its all-time low of 43.8 in the fourth quarter of 2008, while readings above 50 indicate an expansion of output during the quarter.
Frederic Neumann, senior Asian economist at HSBC, said the emerging markets index shows that emerging economies have been on the road to recovery, but added that it may take two to three years for the economy in the US to fully recover.
(HK Edition 10/07/2009 page4)