Special Report: Global Financial Crisis

    By Chen Jipeng, Wang Jingzhong

    HONG KONG, Dec. 5 (Xinhua) -- "The Financial tsunami teaches us not to put all our eggs in one basket," Hong Kong Trade Development Council (TDC) Executive Director Fred Lam said in a recent exclusive interview with Xinhua.

    Lam said the financial tsunami exposed the over-reliance of the Hong Kong economy on exports to the United States, the European Union and Japan, which accounted for 60 percent of Hong Kong's consumer product export to other economies.

    Lam said the TDC estimate that the crisis could last 18 to 24 months, and that the two quarters of 2009 would be the toughest time for international trade.

    "We will not see positive signs take helm until the end of first half," he said.

    Lam said the impact of the current crisis on Hong Kong exports was much larger than the Asian financial storm in 1998 and the SARS outbreak in 2003, with the impact of the former largely confined to Asia and the latter having limited impact on Hong Kong's export, which was still growing in 2003.

　　DOWNWARD ADJUSTMENT OF EXPORT GROWTH FORECASTS

    Lam said the TDC has recently adjusted the Hong Kong 2008 export growth forecast downward to 5.5 percent from 7-7.5 percent, which was put forward in spring.

    TDC statistics show Hong Kong's exports to the United States began to decline around August and September, coupled with an equally negative performance in export to Japan in recent months and modest growth in exports to the European Union.

    Positive growth in export growth in October, at 9 percent, was better than expected but does not represent the whole picture of Hong Kong trade because quite a chunk of its exports to the mainland, Hong Kong's largest trading partner, was components and parts for export manufacturing. In 2009 export decrease was possible, he said.

    "We have yet to give a qualitative projection for 2009, but we are prepared for bad numbers," he said.

    If so, it will be the first export decrease for Hong Kong since the burst of the IT bubble in 2000, when the international trade hub recorded a decrease of 5.8 percent in export.

    Lam said confidence had been a key factor in the current crisis, including a lack of confidence in each other between buyers and sellers, between firms and the financial institutions, as well as a lack of confidence of consumers in their employment prospect.

    "It takes a short time for confidence to tumble, but long to recover," he said.

    Lam said the TDC will have to look to sales statistics in the United States in the two to three weeks before Christmas for clues for Hong Kong exports next year, adding that there has been a modest growth in the first several days of the Thanksgiving holiday.

    Some small and medium enterprises operating in Hong Kong the mainland were dropping out under the impact of the tsunami, Lam said, adding that he was nevertheless confident of the prospect after the coming one or two years.