How will HK go through economic difficulties in 2012

Edited and translated by People's Daily Online

The export-oriented Hong Kong economy will face a difficult situation in 2012 as the overall world economy will remain sluggish.

Several international banks recently predicted that Hong Kong will witness a decline in exports this year, and record an annual economic growth rate between 2 percent and 4 percent.

Analysts believe that strong support from the Chinese mainland will play a crucial role in helping the region riding out hard times despite grim international economic conditions.

Unavoidable decline in exports

Hong Kong Chief Executive Donald Tsang admitted that the region will enter a difficult period in 2012, with economic growth likely to slow sharply to 2 percent, well below 5 percent in 2011. Several international banks forecast that Hong Kong's economic growth for 2012 will average 3.3 percent mainly due to the weak U.S. economic recovery and deteriorating European sovereign debt crisis.

36 measures for boosting Hong Kong's economic development

In addition to difficulties, Hong Kong's economy will also face many opportunities in 2012. The Chinese mainland provided strong support to Hong Kong last year, and will continue to add impetus to the region's economic growth.

Chinese Vice Premier Li Keqiang announced 36 measures for boosting Hong Kong's economic development during his visit to the region in August last year, which have shown the mainland's determination to fully support Hong Kong.

Eleven of the 36 measures focus on the financial sector. The central government encourages Hong Kong to develop creative off-shore RMB financial products, seeks to build a sound RMB circulation mechanism, and also encourages mainland-based companies to go public or issue RMB bonds in Hong Kong. These measures will consolidate Hong Kong's status as an international financial center.