Overview

	2007	2008	2009 (estimated)
Total Market Size	2,625	2,756	2,836
Total Local Production	4,205	4,397	4,525
Total Exports	33,559	35,764	36,801
Total Imports	31,979	34,123	35,115
Imports from the U.S.	1,800	1,837	1,890

All figures are in US$ millions.  The above statistics are unofficial estimates, extracted from Hong Kong Census and Statistics Department and other sources.

Hong Kong’s IT equipment (computer and parts) imports in 2008 reached US$34 billion.  The value of U.S. IT equipment exports to Hong Kong in 2008 was US$1.83 billion, representing 5.4% of Hong Kong’s total IT imports. 

Macau’s IT equipment imports in 2008 were approximately US$263 million.

Best Prospects/Services

As a result of the global financial crisis, it is expected that business users will most likely shift from capital expenses to operational expenses when budgeting for IT, thus consumption-based, subscription-based IT services will likely be more popular in 2009.  Government projects in the area of e-government and wireless infrastructure will also be another potential growth area.

Opportunities

International Data Corporation (IDC) estimates that Hong Kong’s IT market spending in 2009 will grow only by 2.9% instead of its original forecast of 6.7%.  Despite the revision, IDC notes that Asia Pacific is still in a good position relative to other regions of the world.   

Hong Kong has experienced a significant decline in IT demand since the start of the economic downturn, especially in the financial services sector, resulting in smaller budgets for IT spending.  According to IDC’s recent survey, belt tightening is expected to drive migration to technologies and solutions that will support consumption-based pricing, including managed services or “software as a service” (SaaS) in 2009.  There will also be interest in solutions supporting risk management and compliance, as well as solutions such as collections and recovery, credit scoring, and portfolio and exposure analytics.

Although spending in the private sector is expected to decline, government public spending is expected to increase to stimulate demand and employment.  For instance, a recent local article entitled “Hong Kong Government Prioritizes IT Infrastructural Development” revealed that the Hong Kong Government, during a time of economic uncertainty, is spending on infrastructure projects, and it is including IT consultation during the beginning stages.  The Hong Kong Government has always been one of the major driving forces behind IT development and usage in Hong Kong.  Estimated government IT spending for fiscal year 2008/2009 is US$ 705 million. 

Although Hong Kong is a relatively small market for U.S. IT exports, U.S. companies should consider Hong Kong as a gateway into the mainland China market.  A substantial amount of IT products imported into Hong Kong is re-exported to China.  In 2007, about 60% of Hong Kong’s total exports of IT equipment went to China, totaling approximately US$ 20 billion.

Macau

According to the Macau External Merchandise Trade Statistics of 2008, the importation of capital goods has decreased by 8.9% over 2007. The figure is not surprising as the gaming industry experienced a slowdown (10% drop in gambling revenue in the 3^rd quarter) in 2008.  With gaming revenue down, many new gaming- and hospitality- related construction projects have been postponed, resulting in immediate cutback in IT spending for existing casinos and the postponement of IT investments in new projects.  The near term outlook for Macau ICT spending is not bright.

Resources

Major Trade Shows:

International ICT Expo < br/> http://ictexpo.com
April 14-17, 2009
Venue: Hong Kong Convention and Exhibition Center

7^th Annual Asian i-Gaming Congress & Expo (AiG 2009)
http://www.ipim.gov.mo
February 24-26, 2009
Venue: Cotai Strip, Cotai Expo TM

G2E Asia 2009
http://www.ipim.gov.mo
June 2-4, 2009
Venue: Cotai Strip, Cotai Expo TM

Associations:

Information and Software Industry Association
Ms. Satti Wong
Tel: (852) 2622-2867
Fax: (852) 2622-2731
Email: info@N0SPAM.isia.org.hk
Website: www.isia.org.hk

Hong Kong Information Technology Federation Ltd.
Daniel Ng, President
Tel: (852) 2287-8001
Fax: (852) 2287-8038
Email: daniel.ng@N0SPAM.hkitf.org.hk
Website: www.hkitf.org

Hong Kong Wireless Technology Industry Association Ltd.
John Chiu, Chairman
Michael Kan, Executive Director
Tel: (852) 2370-3130
Fax: (852) 8208-8782
Email: contact@N0SPAM.hkwtia.org
Website: http://www.hkwtia.org

Hong Kong Internet Service Providers Association
York Mok, Chairman
Tel: (852) 2803-2669
Fax: (852) 2803-2671
Email: york@N0SPAM.hkispa.org.hk
Website: www.hkispa.org.hk

For more information about this industry sector, please contact U.S. Commercial Service:

Fanny Chau, Commercial Specialist
Email: fanny.chau@N0SPAM.mail.doc.gov
Tel: (852) 2521-3721; Fax: (852) 2845-9800