Hong Kong exports have grown by 1.4 per cent year on year in October, marking an end to a 17-month contraction as trade with mainland China and the United States has increased, but the city government has warned challenges will persist amid heightened geopolitical tensions.
The value of goods sold abroad rose to HK$379.9 billion (US$48.7 billion) last month, with imports increasing by 2.6 per cent to HK$405.6 billion, resulting in a trade deficit of HK$25.8 billion, the Census and Statistics Department revealed on Monday.
But Hong Kong logged an 11 per cent decline in exports during the first 10 months of this year compared with the same period in 2022. The city last recorded an expansion in exports in April last year.
Hong Kong economy still growing but gains marginal even with tourism boost
Hong Kong economy still growing but gains marginal even with tourism boost
At the Hong Kong Financial Forum 2023 earlier in the day, Financial Secretary Paul Chan Mo-po warned exports would decline in the future.
Chan said a number of participants at the Asia-Pacific Economic Cooperation summit held earlier this month in San Francisco agreed that economic growth in 2024 would be slower compared with this year.
The Hong Kong government earlier lowered its growth forecast for the city’s gross domestic product this year to 3.2 per cent from 4 to 5 per cent.
A government spokesman said while there was a modest year-on-year rise in exports last month, the overall performance largely remained weak as there was a notable fall in trade with the European Union, despite an increase with the mainland and the United States.
“Looking ahead, the difficult external environment amid heightened geopolitical tensions and tight financial conditions will continue to weigh on Hong Kong’s export performance in the near term,” he said.
The city experienced an overall improvement in Asia, as total exports to the region grew by 5.2 per cent in October.
Shipments to the mainland rose by 5.6 per cent, while those to India, Vietnam and Thailand recorded an uptick of 28.6 per cent, 15.2 per cent and 13.6 per cent, respectively.
Hong Kong’s Paul Chan says exports likely to face significant hurdles in 2024
Hong Kong’s Paul Chan says exports likely to face significant hurdles in 2024
Exports to the US from Hong Kong increased slightly by 0.5 per cent.
Gary Ng Cheuk-yan, a senior economist for Asia-Pacific at Natixis Corporate and Investment Bank, said while a low base effect was behind the growth in exports, momentum was still slowly improving.
“The global tech cycle has started to turn around and demand [on the mainland] is gradually picking up,” he said. “More firms have placed export orders again ahead of festivals, such as Singles’ Day sales and Black Friday, as the post-Covid inventory stress has eased.”
Ng predicted Hong Kong would likely continue to experience a growth in exports in the last two months of this year, but the trade environment would remain challenging due to uncertainties in global consumer sentiment.