Economic Glossary

The acronym for an association of five major emerging economies: Brazil, Russia, India, China and South Africa.

Acronym in full: The Group of Eight
The Group of Eight (G8) is a forum for the governments of eight of the world’s largest national economies, United States, Japan, Germany, United Kingdom, Italy, Canada and Russia. With the G20 major economies growing in stature, world leaders from the group announced in 2009 that the group will replace the G8 as the main economic council of wealthy nations.

Acronym in full: World Trade Organization
The World Trade Organization (WTO) commenced operation in 1995 after the Uruguay Round negotiations and the signing of the Marrakech Agreement. WTO is an organization for trade opening. It operates a system of trade rules which has a basic structure of the Marrakech Agreement and its four annexes. Annex 1 includes trade in goods (GATT), trade in services (GATS) and intellectual property rights (TRIPS); Annex 2 is on dispute settlement, Annex 3 on trade policy review and Annex 4 on plurilateral agreements. As of March 2013, WTO has 159 member economies.

World Bank
The World Bank Group aims at ending extreme poverty and sharing prosperity. The Group consists of five organizations.
(1) The International Bank for Reconstruction and Development (IBRD) which lends to governments of middle-income and creditworthy low-income countries,
(2) The International Development Association (IDA) which provides interest-free loans and grants to governments of the poorest countries,
(3) The International Finance Corporation (IFC) which helps developing countries achieve sustainable growth by financing investment, mobilizing capital in international financial markets, and providing advisory services to businesses and governments,
(4) The Multilateral Investment Guarantee Agency (MIGA) which offers political risk insurance (guarantees) to investors and lenders to promote foreign direct investment into developing countries, and
(5) The International Centre for Settlement of Investment Disputes (ICSID) which provides international facilities for conciliation and arbitration of investment disputes.

Acronym in full: The Organization of the Petroleum Exporting Countries
The Organization of the Petroleum Exporting Countries (OPEC) was founded in 1960 by five countries, Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. Currently it has a total of 12 member countries, including Algeria, Angola, Ecuador, Libya, Nigeria, Qatar and UAE.

Accronym in full: The Organisation of Islamic Cooperation
The Organisation of Islamic Cooperation (OIC) is the second largest inter-governmental organisation (after the United Nations) and has 57 member states. OIC was established in September 1969 at a historical summit in Rabat, Morocco, with the objective of safeguarding and protecting the interests of Muslims and promoting peace and harmony around the world.

Acronym in full: The Association of Southeast Asian Nations
The Association of Southeast Asian Nations (ASEAN) was established in 1967 with the signing of the ASEAN Declaration (Bangkok Declaration) by Indonesia, Malaysia, Philippines, Singapore and Thailand. Brunei Darussalam then joined in 1984, followed by Vietnam, Lao PDR, Myanmar and Cambodia subsequently, making up what is today the ten Member States of ASEAN. The aims and purposes of ASEAN are mainly to promote economic growth, social progress and cultural development in the region though collaboration and mutual assistance, with a goal to establish an ASEAN Economic Community (AEC) by 2015.

Acronym in full: ASEAN Economic Community
ASEAN Economic Community (AEC) is the goal of regional economic integration by 2015. The ASEAN Economic Blueprint signed by ASEAN leaders at the ASEAN Summit in 2007 serves as the master plan guiding the establishment of the AEC. Visions of the AEC: (a) a single market and production base, (b) a highly competitive economic region, (c) a region of equitable economic development, and (d) a region fully integrated into the global economy.

WTO Ministerial Conferences
The topmost decision-making body of the WTO is the Ministerial Conference, which usually meets every two years. It brings together all members of the WTO, all of which are countries or customs unions. The Ministerial Conference can take decisions on all matters under any of the multilateral trade agreements.

Acronym in full: Asia-Pacific Economic Cooperation
Asia-Pacific Economic Cooperation (APEC) is a forum for facilitating economic growth, cooperation, trade and investment in the Asia-Pacific region. Its 21 Member Economies are Australia; Brunei Darussalam; Canada; Chile; People’s Republic of China; Hong Kong, China; Indonesia; Japan; Republic of Korea; Malaysia; Mexico; New Zealand; Papua New Guinea; Peru; The Republic of the Philippines; The Russian Federation; Singapore; Chinese Taipei; Thailand; United States of America; Vietnam.

Acronym in full: International Monetary Fund
The International Monetary Fund (IMF) is an organization of 188 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world. It provides policy advice and financing to members in economic difficulties and also works with developing nations to help them achieve macroeconomic stability and reduce poverty.

Acronym in full: The Organisation for Economic Co-operation and Development
The Organisation for Economic Co-operation and Development (OECD) was established in 1961 to promote policies that will improve the economic and social well-being of people around the world. The OECD provides a forum in which governments can work together to share experiences and seek solutions to common problems. Current membership include 34 countries span across the world, they are Australia, Austria, Belgium, Canada, Chile, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Japan, Korea, Luxembourg, Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Turkey, the United Kingdom, United States of America.

Acronym in full: Trans-Pacific Partnership
Trans-Pacific Partnership (TPP) is a proposed trade agreement under negotiation by Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US and Vietnam. The US is now the prime mover in TPP negotiation. Once ratified, the TPP which will eliminate most tariff and non-tariff barriers to trade and investment, will have a huge impact on regional and global economic growth.

Acronym in full: European Central Bank
The European Central Bank (ECB) is the central bank for conducting the single monetary policy for Europe’s single currency, the euro. Its main task is to maintain the euro’s purchasing power and thus price stability in the euro area. The euro area comprises the 17 European Union countries that have introduced the euro since 1999.

European Union
Acronym in full: European Union
The European Union (EU) is an economic and political union. It now comprises 28 member states, namely, Austria, Belgium, Bulgaria, Croatia, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the United Kingdom.

Acronym in full: European Free Trade Association
The European Free Trade Association (EFTA) was founded by the Stockholm Convention in 1960 to promote free trade among its members and closer economic cooperation with the western European countries. EFTA has signed free trade agreement with the EU and concluded a worldwide network of free trade and partnership agreements. While some of its founding members have joined the EU, today the EFTA has only four members, namely Iceland, Liechtenstein, Norway and Switzerland.

Acronym in full: Economic and Monetary Union
The Economic and Monetary Union (EMU) represents the convergence of member states of the European Union by the adoption of a single currency, euro, with the conduct of a single monetary policy under the responsibility of the ECB.

European Parliament
The European Parliament is one of the EU’s main law-making institutions, along with the Council of the European Union. Its members (MEPs) are elected once every five years by voters from across the 28 Member States.

Acronym in full: Group of Twenty Finance Ministers and Central Bank Governors
Group of Twenty Finance Ministers and Central Bank Governors (G20) is a forum for cooperation and consultation on matters pertaining to the international financial system. The G20 started in 1999 as a meeting of Finance Ministers and Central Bank Governors in the aftermath of the Asian financial crisis. In 2008, the first G20 Leaders Summit was held, and the group played a key role in responding to the global financial crisis. The G20 members are Argentina, Australia, Brazil, Canada, China, European Union, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, United Kingdom, United States. They represent the largest industrialised and developing nations in the world.

Acronym in full: APEC Business Advisory Council
The APEC Business Advisory Council (ABAC) was established in 1995. ABAC comprises up to three senior business people from each APEC economy. ABAC represents a diverse range of sectors and includes small and large enterprises. ABAC meets four times per year to discuss business sector priorities and concerns, and to present advices and recommendations to APEC Leaders in an annual dialogue.

Acronym in full: regional trade agreement
Regional trade agreements (RTAs) have become increasingly prevalent since the early 1990s. All RTAs in the WTO have in common is that they are reciprocal trade agreements between two or more partners. In recent years, there is a global trend towards continent-wide mega-regional trade agreements such as the TPP or RCEP.

Fair trade
Fair trade is a social movement that promote greater equity in trade. It focuses, in particular, on exports from developing countries to developed countries, notably coffee, tea, chocolate, honey, handicrafts, etc. There are several recognized Fairtrade certifiers, including Fairtrade, IMO and Eco-Social.

Anti Dumping
According to the WTO, if a company exports a product at a price lower than the price it normally charges on its own home market, it is said to be “dumping” the product. If dumping is proved after investigation, anti-dumping measures can be imposed on imports of the product concerned.

Acronym in full: non-market economy
In general, the termf “non-market economy” means any economy that does not operate on market principles of supply and demand, so that sales of merchandise in such economy do not reflect the fair value of the merchandise. According to the WTO, a country is regarded as a non-market economy if the government has a complete or substantially complete monopoly of its trade and where all domestic prices are fixed by the State. In cases of dumping investigation, since a strict comparison with home market prices may not be appropriate, importing countries can exercise significant discretion in the calculation of normal value of products exported from non-market economies.

Middle income trap
The middle income trap is a phenomenon of which fast growing developing economies plateau or stagnate after reaching middle income levels, and fail to advance to the rank of high-income economies. The problem usually arises when developing economies experience rising wages and become less competitive than low income economies in manufacturing and exports. Meanwhile, they are not able to compete with advanced economies in high-skill innovations and technology.

Acronym in full: Free Trade Agreement
Free Trade Agreement (FTA) is a treaty between two or more countries/economies, such as CEPA or NAFTA, to form a free trade area, whose members agree to eliminate tariffs and non-tariff barriers for goods and services traded between them.

Acronym in full: The General Agreement on Trade in Services
The General Agreement on Trade in Services (GATS) is a treaty of the WTO. In view of the growing importance of trade in services, GATS aims to establish a multilateral framework of principles and rules for trade in services with a view to the expansion of such trade.

Acronym in full: Regional Comprehensive Economic Partnership
Regional Comprehensive Economic Partnership (RCEP) is a Free Trade Agreement (FTA) scheme of the 10 ASEAN Member States and its FTA Partners (Australia, China, India, Japan, Korea and New Zealand) to be concluded by the end of 2015. RCEP negotiations were launched by the Leaders of the 16 participating countries in the margins of the East Asia Summit in November 2012. The core of the negotiating agenda will cover goods trade, trade in services, investment, economic and technical cooperation, and dispute settlement.

Acronym in full: Trade-related Aspects of Intellectual Property Rights
Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS) is a treaty of the WTO. As intellectual property became more important in trade, TRIPS aims to narrow the gaps in the way these rights are protected around the world, and to bring them under common international rules. It establishes minimum levels of protection that each government has to give to the intellectual property of fellow WTO members.

Acronym in full: The General Agreement on Tariffs and Trade
The General Agreement on Tariffs and Trade (GATT) was a multilateral agreement regulating international trade. Its objective was to substantially reduce tariffs and other trade barriers on a reciprocal basis. GATT was signed in 1947 and lasted until 1994, when it was replaced by the World Trade Organization in 1995. An updated General Agreement is now the WTO agreement governing trade in goods.

Acronym in full: quantitative easing
Quantitative easing (QE) is an unconventional monetary policy used by central banks to stimulate the economy when standard monetary policy has become ineffective. With the objective to lower interest rates and increase money supply, the central bank may introduce QE by purchasing a predetermined quantity of government bonds or other financial assets from the market. QE was first used by the Bank of Japan to fight domestic deflation in the early 2000s. Since 2008, QEs have been adopted by the United States, the United Kingdom, and the Eurozone to mitigate some of the adverse effects of the global financial crisis.

Acronym in full: China-ASEAN Free Trade Area
China-ASEAN Free Trade Area (CAFTA) include China and the 10 ASEAN countries. In 2002, the Framework Agreement on Comprehensive Economic Co-operation between ASEAN and China was signed with the intention of establishing CAFTA by 2010. Subsequently both parties signed the Framework Agreement on Trade in Goods, the Framework Agreement on Trade in Services and the Framework Agreement on Investment, and started implementation of the liberalising. By 2010, the establishment of CAFTA was basically completed. In merchandise trade in particular, for China and the old members of ASEAN (Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand), the tariffs for the majority of goods except sensitive ones were reduced to zero beginning 1 January 2010. For new ASEAN members (Cambodia, Laos, Myanmar and Vietnam), tariffs will be cut every two years beginning 2011 until zero tariffs are achieved by 2015.

Acronym in full: North American Free Trade Area
The North American Free Trade Area (NAFTA) comprises the United States, Canada and Mexico. The Free Trade Area was formed in 1994 after the conclusion of the North America Free Trade Agreement which aims to remove all duties and quantitative restrictions for trade, promote investment, enhance intellectual property protection and establish a trade dispute settlement mechanism.

Acronym in full: The APEC Business Travel Card
ABTC was introduced in 1997 to allow fast and efficient travel for business people within the APEC region. Citizens of the APEC participating economies can apply for a ABTC at their national government. The ABTC removes the need to individually apply for visas or entry permits and allows multiple entries into participating economies during the three years the card is valid. Card holders also benefit from faster immigration processing on arrival via access to fast-track entry and exit through special APEC lanes at major airports in participating economies.

Acronym in full: Energy-using Products
Directive of Eco-design Requirements of Energy-using Products (EuP) was adopted by the EU in 2005 and took effect in 2007 to promote the Integrate Product Policy (IPP). EuP establishes a framework under which manufacturers of energy-using products will, at the design stage, be obliged to reduce the energy consumption and other negative environmental impacts that occur during the product’s life cycle.

Acronym in full: Generalized System of Preferences
The Generalized System of Preferences (GSP) allows WTO member to lower tariffs for the least developed countries, without also lowering tariffs for rich countries. The principle of GSP was agreed at the United Nations Conference on Trade and Development (UNCTAD), and is a facility granted to developing countries (“beneficiary countries”) by certain developed countries (“donor countries”). The GSP schemes offered by the various donor countries and their rules of origin differ fundamentally.

Acronym in full: original brand manufacturing
Original brand manufacturing (OBM) means the manufacturers own the brands and are responsible for developing and designing their own products.

Acronym in full: original design manufacturing
Original design manufacturing (ODM) refers to the production arrangement under which manufacturers provide the pre-production services, mainly product concept development and detailed product design, as well as manufacture the products under the buyer’s label.

Acronym in full: compound annual growth rate
Compound annual growth rate (CAGR) is the average year-over-year growth rate over a specified period of time. It is is calculated by taking the nth root of the total percentage growth rate, where n is the number of years in the period being considered.

Acronym in full: central business district
Central business district (CBD) is the commercial heart of a city. Hong Kong is generally reckoned as a CBD for Asia due to its effectiveness in reaching out to the Asian markets and conducting sourcing in the region.

HKTDC Export Index
The HKTDC Export Index is designed to monitor the current export performance of Hong Kong traders and guages their near-term prospects. With a reading above 50, the Index indicates that more than half of the surveyed traders incline towards the upside, which can be interpreted as an upward trend and an increase in confidence.

Acronym in full: Agreement on Government Procurement
The Agreement on Government Procurement (GPA) is a legally binding agreement in the WTO focusing on the subject of government procurement. It is a plurilateral treaty administered by a Committee on Government Procurement, which includes the WTO Members that are Parties to the GPA. GPA is designed to make laws, regulations, procedures and practices regarding government procurement more transparent and to ensure they do not protect domestic products or suppliers, or discriminate against foreign products or suppliers.

Acronym in full: regional distribution centre
Regional distribution centre (RDC) is defined as a facility/location that distributes finished goods or parts to more than one country or economy in a region, with VAS frequently being provided in order to prepare goods for distribution. Common forms of VAS include storage, packaging and repacking, labelling and re-labelling, quality checking, documentation and customs clearance, compliance and modifications. Hong Kong is a RDC in Asia.

Gini-coefficient is the most commonly used measure of income inequality. The coefficient varies between zero to one. A zero coefficient reflects complete equality and one indicates complete inequality. i.e. the smaller the Gini-coefficient, the more equal in income distribution.

Offshore trade
Offshore trade in Hong Kong refers to trade that is handled by companies in Hong Kong, of which the goods concerned are originated outside Hong Kong and are being dispatched to an overseas buyer through direct shipment or transshipment without touching Hong Kong.

Business to business

Business to consumer


Acronym in full: online to offline e-commerce
Online to Offline e-commerce, i.e. attracting users online and directing them to offline physical stores which may involve online payment to download e-vouchers, e-coupons and e-tickets, offline verification or redemption.