Blog

Hong Kong Economy: 2017 in review

A gist of the blog:

The global economy has gone through some though moments over the past some 300 days, and has shown notable signs of improvement lately. Inflation remains mild and asset prices are on the rise. The overall economic outlook is positive. In 2018, several factors will affect global economic development and the financial markets, including notably the gradual increase of the US interest rates, the continued reduction of balance sheet of US Federal Reserve, as well as the tax reform in the US. The composite effect of these factors could significantly influence the global capital flow as well as the cost of capital and operation for businesses.

On the other hand, technological innovation has transformed people’s behaviour and consumption patterns. At the same time, Artificial Intelligence has brought about disruptive changes to the business and operation model of many industries. For instance, with the application of technology and AI, more advanced equipment can be employed for production and quality management, and enable customised, small-batch production that can better meet consumers’ preference. This trend also induced changes in companies’ set-up of production lines and supply chain, as well as the marketing strategies.

Promoting economic development while managing risks amid the vigorous capital flow, rising interest rates and technological revolution is one of the major tasks of the Government in the coming year.

December 31, 2017