Hong Kong's economy will be the fastest-growing in the world this year, with the mainland coming a close second, according to Nomura International's William Overholt. The investment bank's executive director yesterday said he expected the SAR to see economic growth in excess of 9 per cent this year - three percentage points higher than the Government's recently reported estimate of 6 per cent for the year. 'Hong Kong will almost certainly be the fastest-growing economy in the year 2000, with China not too far behind,' Mr Overholt said in a speech to the Australian Chamber of Commerce. 'Nobody in the world does it the way Hong Kong does,' he said of Hong Kong as a manufacturing centre. The Hong Kong economy grew by 14.3 per cent in the first quarter, sparking predictions from economists of a 9 per cent jump in the first half. The first-quarter result prompted some analysts to forecast double-digit annual gross domestic product figures, but a slowdown in the second half is now expected after such a significant improvement earlier in the year. Still, Mr Overholt was confident of a higher annual rate. 'Hong Kong has been very down at the mouth . . . but that turns out to be a statistical artefact,' he said yesterday. 'Hong Kong is far ahead of Singapore . . . and the rest of Asia in many dimensions.' Mr Overholt described the SAR as a 'manufacturing empire' with hugely profitable trade and uniquely efficient in the global marketplace. 'So when the rest of Asia rebounds, Hong Kong is leveraged to that. That's not true of Singapore,' he said. Chase Manhattan Asia economic and policy research director Bijan Aghevli, a former International Monetary Fund senior deputy director for Asia, said that while he agreed Hong Kong's economy had performed well, stating that it would be the best performing in the world was not telling the full story. 'That statement may or may not be true, but it's definitely misleading,' Mr Aghevli said. 'We had huge growth in the first quarter so the annual growth rate will be high [Chase has just raised it to 9.5 per cent],' he said. 'But that first-quarter growth rate will slow down. From here on in, it will slow.' According to Mr Overholt, a strong advocate of Beijing's financial reform package, the mainland growth story was another reason why Hong Kong would surge ahead. 'The hero of economic reform in the world today is China,' he said. 'It is doing things that would be unthinkable anywhere else . . . it's one of the reasons why Hong Kong's economy will be the fastest growing this year.' Asked about the SAR's reliance on externally driven growth, Mr Overholt said he believed there was a gradual flow-on effect domestically from the increase in offshore trade. 'As offshore trade grows, people get paid for managing that trade and they get paid for financing and marketing it . . . and you can see that in the gradual rise of consumption . . . and rents for office space in Central are 50 per cent higher than two years ago,' he said.