"If you look at the economic data in the third and fourth weeks of July, they are much better than I had thought,” Mr Tung added.

Mr Tung’s comments were backed up by a flurry of positive numbers coming from economists, local companies and the international business community.

Hong Kong’s economy was hard hit by a three month outbreak of severe acute respiratory syndrome, or Sars. The last case was reported on 11 June and Hong Kong was removed from the WHO list of Sars affected areas 12 days later. Since then all suspected cases have tested negative.

Overseas buyers flock to Hong Kong 

One of the most visible signs of international confidence returning was demonstrated at Hong Kong’s mega houseware, gift and premium trade fair. Held at the end of July, the merged event attracted the highest ever number of buyers. More than 62,000 people, including 24,000 from outside Hong Kong, jostled for space among the 3,800 exhibitors. 

The result was a clear indication of the importance buyers place in Hong Kong as an essential sourcing location for new product lines.

Brigette Fahrngruber, Organiser of the German Pavilion at the Fair said, “We have 11 exhibitors this year and eight of them have been here for many years; their return speaks volumes for the fruitful business deals they have made here and the overall success of the fair.”

For more details, click Largest turnout ever at merged trade fair

The houseware and gifts fairs came on the back of a successful Fashion Week and Jewellery and Accessories Fair. A further 100 conference and trade events are scheduled between now and end 2003.

Export continues to surge 

Export and import figures also buoyed sentiment. In the first six months, Hong Kong exports grew by 15 percent, and imports by 13.4 percent, despite Sars, wars in Afghanistan and Iraq and weaker demand from the US.

Chief Economist of the TDC, Edward Leung said that exports of Hong Kong electronic goods are expected to expand at a "robust" pace during the rest of this year as well as in the next, with audio-visual (AV) and information technology (IT) products being the star performers.

"Hong Kong exports, which will continue to benefit from the weak US dollar, will pick up towards the last quarter of 2003, and gain momentum in 2004, when the world economy is expected to recover at a faster pace,” said Mr Leung.

Strong export and import trade also pushed up air and sea cargo volumes. In the first half, air cargo rose 14 percent and sea trade was up seven percent.

International business confidence soars

Three heads of leading chambers of commerce, speaking at a recent panel discussion, stressed that Hong Kong’s stable fundamentals allow businesses to react quickly and effectively to changing economic conditions. Chairman of the American Chamber of Commerce, Jim Thompson said, “I believe Hong Kong’s next quarter GDP could surprise everyone and be higher than expected.”

For more details, click "An excellent place to do business say business leaders"

Hong Kong’s appeal for overseas investors continued to draw in foreign projects. Recent EU investors included the German chemical giant, BASF Group, which expanded its Greater China and East Asia headquarters in Hong Kong; Rolls-Royce, which opened its first showroom in Central and Danish footwear manufacturer ECCO.

From the US, skin care retailer Nu Skin Enterprises, opened a retail outlet; and from Australia, New Zealand Natural open its first (and fastest growing) Asia branch, while lighting and pyrotechnic specialists, Laser Vision also set up offices. 

Tourism hardest hit by Sars, but recovery positive

Hong Kong’s tourism sector was the first to come out with better than expected numbers. The Airport Authority said passenger numbers had taken a dramatic rise and already stood at 80 percent of pre-Sars levels. Business travel had recovered fully, Airport Authority chairman, Dr Victor Fung said. 

Tourism was also showing positive results with a 70 percent recovery. Grace Lee, the Tourism Board’s deputy director, said the trend appeared encouraging. “Early figures from July confirm a continuing upward pattern. We have already surpassed June arrivals with more than 760,000 visitors in the first 20 days of July.”

Hong Kong Hotel Association representing the hotel industry also reported that many four-star hotels have been fully booked in the past week and that hotels expected to see an occupancy revival of 60 per cent in July.