Imported Inflation by pptfiles

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									The Effects of RMB Appreciation in Hong Kong

Content
• Introduction • Effects
– Positive – Negative

• Expectation

Reasons for Appreciation
Renminbi (RMB) had been appreciated in recent years
– International pressure – Rapid economic development

– The large sum of exports along with very cheap cost

Current Situation
• The RMB has been revalued 18 times with the US in the past 3 months • HKD is now weaker than the RMB • The exchange rate was raised up to US$1 to RMB7.7303 in March 2007

資料來源: 中國人民銀行

Current Situation
• Since the US dollar is still pegged to the Hong Kong dollar nowadays, the appreciation of RMB does affect the HK economy

Positive Effects of RMB Appreciation
• Increase income of service industries • Increase employment opportunities

Increase income of service industries
• • • • Tourism Hotel Retailing Catering

Increase income of service industriesTourism, Hotel, Retailing, Catering

1. Appreciation of RMB
 Depreciation of HK dollar 2. The broaden of Free Travel Scheme policy

Increase income of service industriesTourism, Hotel, Retailing, Catering

• Mainlanders travelers are increased
• The stay rate of hotel is increased • Consumption of Mainland travelers is increased • The demand for catering is increased

消費市道強勁去年收92億 海港城生意額破紀錄
新報 A12 地產 2007-01-31
• 海港城物業管理高級經理柯靄邦說,海港城現時的內地顧客 比例逾30%,受惠於人民幣升值,內地顧客消費能力相對提 高,再加上經濟好轉,市民更願意消費,故預料該商場今年 營業額會有15至20%增長。

• 至於去年內地居民在海港城以銀聯卡「刷卡」消費額佔5億 元,佔去年全年124億元銀聯卡消費總額約4%,刷卡次數多 達17萬次,平均每次消費額3000元。

經濟復蘇及憧憬人民幣升值 零售旅遊股後市看好
財華香港 熱點專題 2006-12-27

• 酒店股方面,隨著香港多個大型展覽陸 續推出,以及旅遊業持續興旺,酒店股 股價亦近全年高位,香格里拉股價已升 至20元以上,反映入住率上升及房租增 長等的利好因素,股價全年升近60%,

Increase Employment opportunities

• Service industry

The situation in Hong Kong now
RMB exchange rate is raised ↓ Value of Hong Kong dollar has decreased ↓ Mainlanders buying power is increased in HK ↓ Mainlanders travelers are increased

人民幣升值刺激消費 香港成為內地旅客首選地
hongkong.com news 2006-12-22
• 受近期人民幣升值影響,今年12月,僅深圳康輝旅行社一 家接收的赴港旅遊團及香港個人遊人數與去年同期相比, 上升1成左右。 • 不僅深圳旅行社接客接得「笑開懷」,相信香港旅遊界也 異常欣喜。周樑淑怡表示,人民幣升值使得香港零售、旅 遊及酒店等行業受惠。

Increase employment opportunitiesService industries

• Demand for retailing, catering and hotel services ↑ • Demand of labors in service industry ↑

Increase Employment opportunities
• Manufacturing industry

Increase employment opportunitiesManufacturing industries

1990s • Hong Kong traders move the factories from HK to China so as to reduce costs.

Now • RMB exchange rate rise → production cost increase in China → factories move back to HK → the demand of labor force increase in HK

人民幣升值商舖再炒高
大公報
2005-7-26
• 工商部營業董事陳偉志表示,港商於國內設廠成本將因人 民幣升值而上升,對現有廠商形成比較大的壓力。因與本 港設廠成本距離收窄,預計部分廠商會陸續回流本港或將 部分生產工序調回本港,對本港工廈需求量上升。 • 事實上,由於CEPA政策及美國再度實施配額限制,近年 市場上亦錄得廠商回流本港承租更大廠廈樓面個案。 • 鑑於未來兩年供應短缺,陳偉志預計未來半年工廈成交呎 價有15至20%的升幅,租金依然會穩步上揚,約有10至 15%的升幅,空置率則會進一步下降。

Negative Effects of RMB Appreciation
• Imported inflation • Increase costs to manufacturers

Imported Inflation
• 70% of Hong Kong's food imported from the Mainland E.g. Rice Vegetables Fruits

Main Supplier

Month

China

Japan

Taiwan America Singapore

2004 918,275 256,141 153,812 111,994 2005 1,049,335 256,501 168,227 119,252 2006 1,192,952 268,140 194,917 123,569
Sources: Census and Statistics Department

110,986

135,190

164,837

Imported Inflation
• RMB’s value has increased  has decreased Hong Kong dollar • The price of commodities would be risen in Hong Kong

Imported Inflation
• Hong Kong retailers are facing the high production costs • Rise of the RMB is fully transferred to consumers • The price of goods would be increased

人民幣升值 麥當勞叫苦 經營成本增 不排除刪優惠加價
麥當勞董事總經理劉士盛 指出︰「近年多項營運成 本如租金、電費、油價等 不跌反升,加上麥當勞大 部分食物都由內地供港, 例如生菜、包裝紙及沙律 用的蔬菜、雞肉、醬料等, 人民幣升值對經營成本構 成壓力,不排除日後剔除 某些優惠或加價。」 (明 報)

Imported Inflation
• Food makes up the largest proportion of expenditures by lower income households • Hong Kong consumer would be suffer from the problem of inflation to reduce their saving • 32.1 % of household’s income

Increase Cost to Manufacturers
• Mainly labor intensive industry in HK In the Past…… • Most of Hong Kong manufacturers moved their factories to China
- China offered a large amount of labor power
 low wages

- Supplied plenty of resources
 reduce cost

Increase Cost to Manufacturers
Nowadays…… • The circumstance is changed significantly • Production process completed in China is tended to increase production costs to manufacturers

Increase Cost to Manufacturers
• Low gross margins • Interrupt the repatriation of investment and funds

affect the traders who do business with manufacturers in the Mainland

Increase Cost to Manufacturers
• around 60,000 Hong Kong businesses in the Mainland • 52% for exportation • reflects the amount of Hong Kong manufacturer who being affect by RMB, is not small (by BOCHK)

Increase Cost to Manufacturers
• Appreciation of RMB will affect different types of labor intensive industry

1. increase the Increase Lower Profit wages labour production cost • Electronic 2. resources cost
• Garment

What is the Development of RMB Appreciation in Future?

Revalue, Devalue or Stable?
2006 年上半年 升跌幅(%) 2005年下半年至 2006年上半年升 跌幅(%)
-4.74 -3.58 *3.56 4.34 4.66 7.45 -1.78 -1.87 6.44 -1.64 9.14 10.55 6.9 7.52 0.4

• Exchange rate of RMB was still weaker and devalued among most of the foreign currencies

美元 人民幣 歐元 英鎊 加拿大幣 澳幣 日圓 星元 台幣 韓圜 泰銖 菲律賓披索 印尼盾 馬來西亞幣

Major 7 Broad 26 CNY EUR GBP CAD AUD JPY SGD NTD KRW THB PHP IDR MYR

-4.92 -3.33 0.98 7.2 6.42 2.5 2.37 2.56 5.29 1.12 6.62 8.46 1.71 7.85 3.43

*含2005/7/22人民幣第一次調整2%
Source: Central Bank of Republic of China (Taiwan)

Revalue, Devalue or Stable?
• Trade surplus in China is still increased steadily after the revaluation of RMB
Trade in goods with the US
350,000.00 300,000.00

US Dollar

250,000.00 200,000.00 150,000.00 100,000.00 50,000.00 0.00

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

Year
Imports Exports Balance

Positive or Negative Effect?
匯豐銀行亞太區業務策略及經濟顧問梁兆基
《人民日報》 (2007-01-16 )
• 人民幣貴過港幣“利多於弊” • 1998年時港元為區內最貴貨幣,但經濟差,沒有 人消費

• 相反港元貶值有利香港服務出口到內地,足以彌補港 元購買力轉弱。

Positive or Negative Effect?
Viewpoint - The Renminbi and the HK dollar
Joseph Yam 30 November 2006

• the cost of trips to the Mainland is risen
• Although inflationary effect on the price of goods imported from the Mainland is exist, there is only 5% of goods imported from China are consumed in HK

Positive or Negative Effect?
Viewpoint - The Renminbi and the HK dollar
Joseph Yam 30 November 2006

• visitors to Hong Kong from the Mainland and other countries whose currencies are also appreciating against the US dollar

• Positive effects on the services sector and on Hong Kong’s general competitiveness.

Conclusion
• The Appreciation of RMB are beneficial to Hong Kong economy in the long run.

Q&A

Q.1
What positive and negative effects does revaluation of RMB brings to Hong Kong?

Q.2
Why RMB need to be revalued?

Q.3
Why do we expect the RMB will keep revaluating?


								
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