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MAY 2 - 8, 2023

ECONOMY AND FINANCE

The International Monetary Fund (IMF) commended the Hong Kong Special Administrative Region (HKSAR) Government’s efforts to boost economic growth and safeguard financial stability. In a statement (May 5), following a meeting staff with Hong Kong officials as part of their annual Article IV discussions, the IMF said Hong Kong’s financial system remained resilient, and the city continued to play its role as an international financial center under the challenging global macro-financial environment. Welcoming the highly positive assessment, Hong Kong Financial Secretary Paul Chan said this reflected Hong Kong’s capability, determination and accomplishment in maintaining financial stability and economic growth.

Hong Kong’s economy in the first quarter of 2023 grew 2.7% year-on-year, according to the advance estimates on GDP (May 2), ending four consecutive quarters of declines. The GDP growth in the first quarter of 2023 was mainly attributable to the visible increase in domestic demand. Looking ahead, inbound tourism and domestic demand will remain the major drivers of economic growth this year, with improving economic situation and prospects boosting domestic demand. Exports of goods will continue to face significant challenges with slower growth in the advanced economies continuing to weigh on external demand, though the faster recovery of the Mainland economy should provide some relief. Separately, the city’s total retail sales grew by 40.9% in March year-on-year to a provisionally estimated US$4.3 billion due to continued improvement in consumer and visitor spending.

Mutual access between Hong Kong and the mainland interest swap markets will start on May 15, with the launch of the Northbound Trading of Swap Connect, allowing global investors from Hong Kong and other countries and regions to participate in the Mainland interbank financial derivatives market through a connection between financial infrastructure institutions in the two markets. The monetary authorities of Hong Kong and mainland China had jointly announced  the Swap Connect for overseas investors in July 2022.

The Hong Kong Monetary Authority (HKMA) hosted (May 4) its first Data Summit , attracting over 260 senior representatives from more than 60 banks, data analytics service providers and data providers. As part of the HKMA’s “Fintech 2025” strategy to encourage the active use of alternative data in banks and promote the development of a data-driven economy, the Summit was organized with the aim of facilitating experience sharing and exchange of ideas, following the launch of the HKMA’s Commercial Data Interchange.

The HKMA raised (May 4) the base rate to 5.5% with immediate effect, according to a pre-set formula and in tandem with the 25-basis point upward shift in the target range for the US federal funds rate on May 3. Separately, Hong Kong’s official foreign currency reserves amounted to US$427.4 billion as at the end of April. This represents over five times the currency in circulation or about 40% of Hong Kong dollar M3.

SPORTS

Hong Kong fencer Vivian Kong regained her number 1 world ranking in women’s épée, after winning gold at a grand prix event (May 7) in Cali, Colombia, when she defeated France’s Marie-Florence Candyssamy 15-8. Earlier, fencer Cheung Ka-long won a silver in men’s foil in a World Cup series event (May 7) in Acapulco, Mexico. He is currently ranked world number 2.

ADMINISTRATION AND CIVIC AFFAIRS

The HKSAR Government announced (May 2) proposals on improving governance at the district level, with key recommendations to strengthen the district governance structure so as to enhance the efficacy of district governance. It aims to complete the legislative amendments before the summer recess of the Legislative Council this year so that the DC election can be held at the end of this year.

BASIC LAW

The Basic Law (BL) is the constitutional document of the Hong Kong Special Administrative Region (HKSAR). It provides the guarantees to maintain our existing way of life, including socio-economic development, the rights and duties of Hong Kong people, the rule of law and other areas. The Basic Law was put into effect on July 1, 1997.

Q: Does the HKSAR enjoy executive, legislative and independent judicial powers?

A: Yes. The National People’s Congress authorizes the HKSAR to exercise a high degree of autonomy and enjoy executive, legislative and independent judicial powers, including that of final adjudication. The Chief Executive heads the HKSAR and the Government of the HKSAR. The Executive Council, consisting of members appointed by the Chief Executive, assists the Chief Executive in policy making. The legislature, which is constituted by election, enacts legislation, while the judiciary exercises judicial power independently free from interference. (BL Articles 2; 16; 17; 19; 43; 54; 55; 66; 68; 73; 85)