THE 2002 NATIONAL account numbers are now in for all Asian countries, which makes this a fine opportunity to pose the question of how Hong Kong stands relative to the rest of the region. The answer to the question, as the first chart shows, is that we are right in line with our regional neighbours in terms of growth of gross domestic product, up and down at the same time and at present showing recovery at the same pace. Now let me admit immediately that this is not a complete sample. I have excluded China and Japan from the figures - China because I frankly have less than complete faith in its GDP figures and Japan because it has marched to a different drummer from the rest of the region for the past 12 years. Aside from Hong Kong, the sample consists of South Korea, Taiwan, the Philippines, Thailand, Malaysia, Singapore and Indonesia. If I had included them, the boom in China would almost have cancelled out the slowdown in Japan and the chart would really not look all that much different. The overall growth rate would be slightly lower and both the dip in 1998 and the compensating recovery two years later would be much less. You would also have had a confused chart with three lines running through each other and good reason to turn to something else. Best compare things that are comparable and keep the charts as simple as I can. But now turn to where Hong Kong shows differences from the others. The biggest single component of GDP is personal consumption expenditure - you and your money in the shops. Personal consumption expenditure across the rest of the sample showed a weighted average growth rate of 4 per cent in the fourth quarter. No such luck in Hong Kong. The comparable figure for us was a negative 2.1 per cent. Notice from the second chart that this is not unusual for us. Any hint of an economic slowdown and we keep our money in our wallets. It was apparent in 1995 and also during the worst of the financial crisis in 1998. The most probable reason for it is that a small and highly externally orientated economy is naturally more susceptible to shifts of confidence in the future. We are by nature worriers, as you could know anyway by reading the headlines of any newspaper published in Hong Kong. But what this also tells us is that economic recovery in Hong Kong remains narrower and possibly more fragile than in other regional countries. It is built on foreign trade much more than recovery elsewhere is built on it. This is no problem with export growth still booming but good times in trade are not guaranteed forever. If Iraqi shopkeepers continue to stand up to invading foreign adventurers, there could well be a toll on economic growth in our major export markets and this would quickly be reflected in our economic performance. Enough of that, however, before I turn into a worrier too. Notice from the figures in the table for individual countries that Hong Kong's growth rate in personal consumption expenditure is not only much lower than the regional average but is also far and away the lowest of any country in the region. Notice, in addition, how different things are in Singapore, which, despite its penchant for central planning, probably still has the most comparable economy to ours. In Singapore, personal consumption expenditure growth is higher than overall economic growth. Its shoppers are pulling its economy up. Ours are keeping ours down. But let me hasten to say here, lest I again get a flood of e-mail on the subject, that I do not regard this as a moral failing or reason for our government to tell Hong Kong people to spend more. If you do not want to take your money out of your wallet, that is your business, not mine, and certainly not our government's. Graphic: jake28gbz
