About the Netherlands

Recent Developments

As the Netherlands 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. As a euro-zone member, it has also adopted the euro as its legal tender from 1 January 2002.

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. 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 the Netherlands rose by 22% to US$5,199 million during the first eleven months of 2010, while its imports from the Netherlands grew by 10% to US$2,005 million.
Buoyed by an upswing in stock building activities and a rebound in exports and business investment, the Dutch economy is estimated to have grown by 1.8% in 2010. However, the start of fiscal deficit reduction and the uncertain export outlook due to the lingering European sovereign debt crisis remain the country’s major hindrances ahead, slowing the pace of its economic growth to a projected moderate rate of 1.5% in 2011.
 
Current Economic Situation

Benefitted from an upswing in the inventory cycle and a revival of exports, the Dutch economy continued to fare well in the first half of 2010 after emerging from the recession in the third quarter of 2009, while sustained government spending and the rebound of business investment also proved to be important growth drivers. However, with the fading of stock building and government spending programmes, the Dutch economy slowed in the third quarter of 2010. In the meantime, the feeble external demand in the midst of the ongoing European sovereign debt crisis further dragged the Dutch economy, given its heavy reliance on foreign trade. In all, the Dutch economy is estimated to have expanded by 1.8% in 2010.

Looking forward, consumer demand, despite an improvement in confidence, is set to remain subdued as incomes are negatively affected by lower wage growth and still-high joblessness, while businesses will continue to grapple with uncertain credit conditions and slim margins. While the Netherlands is one of the most fiscally conservative countries in the euro zone, the start of fiscal deficit reduction in 2011 will also give the government little scope for new fiscal stimuli. These together with the uncertain export outlook in light of the lingering debt crisis in Europe will continue to hover over the Dutch economy. Taken together, the Netherlands is forecast to grow at a more moderate rate of 1.5% in 2011.

Source: hktdc.com