Jake van der Kamp is back, and today he cautions against reading too much into the retail sales figures. It is a standard fallback for newspapers to print stories about economic statistics without caring whether they are significant or not. House prices are one favourite in Hong Kong, and retail sales are another. Recently we had encouraging GDP numbers and they were splashed all over the front page with the interpretation that tourists from the mainland were spending more money in Hong Kong, as if that was a major factor.
The problem for most journalists is that they don't spend much time (if any) understanding the real economy, and since almost everyone goes shopping it is tempting to assume that the retail sector is important to the economy.
Jake points out that over the last 10 years the nominal size of our economy has risen by more than 40 per cent but retail spending has stayed the same (well, it rose up to 1997 and then fell back). So it is much less significant than it once was. We all know that prices of many items have fallen significantly in the last few years, and that will be one reason for the change. The other is that retail sales figures exclude services, which are taking a larger slice of what people spend.
Also, as Ron has quite rightly pointed out that tourism contributes very little to the economy.
How many people were aware that last year (and again this year) many Hong Kong companies were very successful in exporting goods to the United States and Europe? Yes, the goods were mainly manufactured in China (or somewhere else in Asia), but that's a lot of companies employing people in Hong Kong.
Yet it's still retail and tourism that seem to get most of the attention.