Retailing is Hong Kong's second largest industry (after the import and export trade) in terms of sales turnover and number of employees.
Economists are optimistic the influx of Chinese tourists as well as the Closer Economic Partnership Agreement (CEPA), which was signed on June 30 between Hong Kong and China, will give a much needed boost to the local economy.
The CEPA agreement grants Hong Kong goods zero tariff treatment starting next year and will give the city easier access to the huge China market.
George Leung, HSBC chief economist, is forecasting GDP growth of 0.5 percent this year and 1.3 percent next year in the light of the sharp rebound from SARS and the expected flood of tourists.
"We think the numbers should be revised upwards to reflect the recent measures," said Leung.
The Hong Kong government was forced to halve this year's GDP forecast to 1.5 percent from the previous 3.0 percent.
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