Economy shows resilience as AI electronic exports boom

Financial Secretary Paul Chan said on Monday Hong Kong’s economy remained resilient when it moved into the second quarter. This, he said, followed robust growth of 5.9 percent in gross domestic product in the first quarter. Speaking at a meeting of the Legislative Council’s financial affairs panel, Chan said the SAR saw year-on-year growth in merchandise exports of nearly 43 percent in April, driven by export of AI-related electronics products. The city also welcomed more tourists in April and during the Labour Day Golden Week holiday, in addition to seeing improvements in the labour market. However, Chan warned of uncertainties brought about by the Middle East stalemate. "Although the conflict has limited impact on Hong Kong’s economy, it has pushed up international oil prices and inflation pressure," he said. "The ceasefire agreement between the US and Iran is not on solid ground. If tensions escalate again, it is expected to exacerbate volatility in global financial markets, weaken external demand and pose downside risks to global and local economic outlook. "But strong global demand for advanced electronics and AI-related products is expected to help boost exports." Chan also said Hong Kong exports of services would remain robust with tourism booming, cross-border financial activities thriving and demand for business services remaining stable. He also urged the retail and catering sectors to transform themselves to match new consumption trends. "Consumption patterns have changed and people’s expectations are different from before," Chan said. "As a result, some of the big traditional restaurants may find it difficult to survive in the current environment if they continue with their past practices," he said. "At the same time, however, there are distinctive shops and cafes opening up in many districts, and some of them are doing well. Therefore, we encourage the industry to transform." Chan said the government would offer assistance in funding and training to aid in the sectors' transformation. Edited by Thomas McAlinden