Major Economic Indicators



Recent Developments

• As Poland is a member of the European Union (EU), its trade relations with Hong Kong/the Chinese mainland are affected by EU’s common external trade policy and measures.
• Upon the expiry of the textile safeguard quotas by the end of 2007, a joint system with China had been established to monitor EU imports of Chinese textiles and apparel, which was scheduled to operate for one year, covering 8 out of the 10 previously restricted categories. On 11 December 2008, the European Commission announced that the regime of double checking surveillance system was to expire on 31 December 2008. Accordingly, starting 1 January 2009, textile and clothing products originating in China no longer require any import licence or surveillance document before entering the EU.
• The EU’s new scheme on generalised system of preferences (“GSP”) entered into effect on 1 January 2009, and will remain in force until 31 December 2011. While the Chinese mainland remains a beneficiary, certain products, including toys, textiles and textile articles, footwear, furniture, jewellery, electrical equipment and watches and clocks, will be excluded from preferential treatment.
• A number of Chinese mainland-origin products are subject to EU’s anti-dumping duties, including bicycle parts and certain leather footwear, which are of interest to Hong Kong exporters.
• Hong Kong’s total exports to Poland plunged by 30% to US$293 million in the first seven months of 2009, while its imports from Poland grew by 38% to US$72 million.
• Following a 4.8% growth in 2008, the Polish economy has significantly moderated in 2009, ending up with a much slower GDP growth of 0.8% for Q1 and Q2 2009. Worsening job prospects, still-tight credit conditions, continued economic worries in main trading partners have weighed on the Polish economy. Riding on the increasing signs of global recovery, Poland is forecast to manage for 2009 a positive GDP growth of up to 1.0%.

Current Economic Situation

In the wake of the deepening of the global economic crisis, the Polish economy has moderated in 2009, with GDP growth slowing to 0.8% in the first and second quarter of 2009, after a 4.8% expansion in the whole of 2008. Despite cuts in income tax and a modest recovery in industrial output following various fiscal measures, the growth of private consumption and corporate investment has wobbled in response to the worsening situation in the labour market and difficulties in accessing finance, while continued economic worries of its main trading partners, especially Western Europe, have hampered Polish exports.

Looking ahead, although worsening employment prospects and tight credit conditions will continue to dampen consumer confidence and business investment for awhile, tax cuts and rising spending on EU-funded infrastructure projects will help stimulate domestic demand. Moreover, the nascent recovery in Europe, especially Germany, will help the slackening Polish exports to regain momentum, not to mention the growing signs of global economic rebound. All in all, Poland is forecast to manage for 2009 a positive GDP of up to 1.0%, while a more solid growth of up to 2.0% is expected for 2010.

Trade Policy

As a member of the EU (since May 2004), Poland follows EU’s common external trade policy and measures. As a result, Poland’s import tariffs have aligned with the EU tariff rates, which are generally lower than the original Polish rates. Besides, a value-added tax (VAT) of 22% applies to most imports as well as domestic products.

Textiles and Clothing

Hong Kong’s textiles and clothing exports to the EU were previously subject to the World Trade Organisation (WTO) Agreement on Textiles and Clothing (ATC), under which quantitative restrictions on textiles and clothing were eliminated completely on 1 January 2005.

Likewise, the previous quotas imposed by the EU on textiles and clothing products originating from the Chinese mainland were removed on 1 January 2005. However, as a result of the EU-China agreement reached in June 2005, the EU imposed safeguard quotas on 10 categories of Chinese textile products for the period of 2005-2007. Upon the expiry of the textile safeguard quotas by the end of 2007, a joint system with China was established to monitor EU imports of Chinese textiles and apparel for one year, covering 8 out of the 10 previously restricted categories.

On 11 December 2008, the European Commission announced that the regime of double checking surveillance system was to expire on 31 December 2008. Accordingly, starting 1 January 2009, textile and clothing products originating in China no longer require any import licence or surveillance document before entering the EU.

Non-textile Manufacturing Products

Previously, the EU also imposed Union-wide quotas on three categories of non-textile products originating from the Chinese mainland, including certain footwear, porcelain and ceramic tableware/kitchenware. But these quotas were liberalised on 1 January 2005.

Scheme of Generalised Tariff Preferences

The EU’s new scheme on generalised system of preferences (“GSP”) entered into effect on 1 January 2009, and will remain in force until 31 December 2011. The scheme classifies products into two categories, namely sensitive products that enjoy the benefits of reduced tariff rates by 3.5 percentage points, and non-sensitive products that enjoy total tariff suspension. Under the new GSP scheme, the Chinese mainland remains a beneficiary. But certain products, including toys, textiles and textile articles, footwear, furniture, jewellery, electrical equipment and watches and clocks, will be excluded from preferential treatment. Regarding Hong Kong, the territory has been fully excluded from the EU’s GSP scheme since 1 May 1998.

Anti-dumping Measures

The EU has initiated anti-dumping proceedings against certain mainland-origin products. Currently, there are a number of mainland-origin items subject to EU’s anti-dumping measures, including bicycle parts and certain leather footwear (definitive duty at 16.5%), which are among the affected products of interest to Hong Kong.

Other Measures

To combat the spread of the Asian longhorn beetle, the EU introduced in July 1999 emergency controls on wooden packaging material originating in the Chinese mainland. Wood covered by the measures must be stripped of its bark and free of insect bore holes greater than 3mm across, or have been kiln-dried to below 20% moisture content.

For health reasons, the EU has adopted a Directive on the control of the use of nickel in objects intended to be in contact with the skin, such as watches and jewellery. Following the emergency ban adopted in December 1999, the EU has adopted a Directive to ban the use of some phthalates in certain PVC toys and childcare articles on a permanent basis, which will come into effect from 16 January 2007. In addition, the EU has adopted a Directive to prohibit from September 2003 the trading of clothing, footwear and other textile and leather articles which contain azo-dyes, from which aromatic amines may be derived.

On the other hand, the EU has adopted a number of Directives for environmental protection, which may have an impact on the sales of a wide range of consumer goods and consumer electronics. Notable examples include the Directive on Waste Electrical and Electronic Equipment (WEEE) implemented in August 2005, and the Directive on Restriction of Hazardous Substances (RoHS) implemented in July 2006.

On 3 December 2008, the European Commission (EC) presented two proposals: one for a recast WEEE Directive and the other for a recast RoHS Directive. As per the EC, the purpose of a recast WEEE Directive is to tackle a number of technical, legal and administrative difficulties since its entry into force, while as for the recast RoHS Directive, the EC aims to improve implementation by the Member States (e.g., by ensuring a more harmonised implementation), improve enforcement and increase understanding of the provisions.

On the heels of the WEEE Directive and RoHS Directive, the EU’s new Directive on the eco-design of Energy-using Products (EuP) is now in place. This EuP Directive does not directly introduce binding requirements for specific products, but does define conditions and criteria for setting via subsequent measures. On 16 July 2008, the EC presented a proposal to extend the EuP Directive to set compulsory minimum ecodesign requirements for not only energy-using products but all energy-related products. The EuP Directive as it stands now already applies to a wide range of equipment, from office appliances, televisions and hairdryers to boilers, water heaters and industrial fans. The proposed extension, while continuing to apply to energy-using products, will cover products that - while not themselves consuming energy - nonetheless impact on the consumption of energy. The proposal is expected to be subjected to a first reading by the European Parliament and Council before the end of spring 2009.

Moreover, REACH, a EU Regulation, which stands for Registration, Evaluation, Authorisation and Restriction of Chemicals, entered into force in June 2007. Among others, it requires EU manufacturers and importers of chemical substances (whether on their own, in preparations or in certain articles) to gather comprehensive information on properties of their substances produced or imported in volumes of 1 tonne or more per year, and to register such substances prior to manufacturing in or import into the EU.

Highlighted by the 2007 summer of recalls, the European Parliament voted through the new Toy Safety Directive by an overwhelming majority on 18 December 2008. As adopted by the European Parliament, the new Toy Safety Directive provides a clearer definition of what is considered to be a ‘toy’, bolsters safety regulations, clarifies warnings and age-limit descriptions, bans substances which are carcinogenic, mutagenic or toxic for reproduction (CMRs) and restricts the use of heavy metals and fragrances. The Directive has now been forwarded for approval by the European Council. Once adopted, the Directive is expected to enter into force twenty days after its publication in the Official Journal.

Hong Kong’s Trade with Poland ^

Hong Kong’s total exports to Poland plunged by 30% to US$293 million in the first seven months of 2009, after growing by 19% to US$726 million in 2008. Major export items in January-July 2009 included telecommunications equipment & parts (shared 17% of the total), electrical apparatus for electrical circuits (9%), toys, games & sporting goods (9%), household type, electrical & non-electrical equipment (5%), and other articles of apparel, of textile fabrics (5%).

On the other hand, Hong Kong’s imports from Poland grew by 38% to US$72 million in the first seven months of 2009, after growing by 44% to US$103 million in 2008. Major import items in January-July 2009 included telecommunications equipment & parts (shared 29% of the total), machinery/equipment & parts for particular industries (15%), prepared or preserved meat & edible meat offal (13%), fresh, chilled or frozen meat & edible meat offal (11%), and plastic waste, parings & scrap (7%).


^ Since offshore trade has not been recorded by ordinary trade figures, these numbers do not necessarily reflect the export business managed by Hong Kong companies.