Jake's View | Mainlanders' spending in Hong Kong doesn't show up in our GDP - that's statistical reality

Cutting the number of solo travellers to Hong Kong will hinder the city's economic growth but only in the short term, according to a think tank's economic simulation.

Not much thinking going on in this think tank, methinks, at least not if it comes up with a howler like this. Contrary to what is implied here, non-resident spending is deducted from the raw figures on consumer activity when gross domestic product is totted up.

That's right. It is deducted from, taken away from, subtracted from the figures, not added to them.

When our statisticians tally up total consumer spending in Hong Kong they create two additional categories - non-resident spending in the domestic market and resident spending abroad.

They then take all that non-resident spending out of the figures so that it has no effect on GDP and they add in the amounts that Hong Kong residents have spent abroad. Thus if mainland tourist spending here now crashes, our economy will march on untroubled.

But I hear you. This is all wrong, you say. Things should be the other way round. What non-residents spend here is a boost to our economy and what Hong Kong people spend abroad is lost to us.