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Wednesday, January 27, 2016, 08:48

No relief in sight for SAR’s exports

By Luo Weiteng in Hong Kong
No relief in sight for SAR’s exports
Staff workers loading cargoes onto a p lane at Chek Lap Kok International Airport. (Edmond Tang / China Daily)

Hong Kong’s struggling exports sector saw a 1.8-percent drop in trade last year after falling for eight straight months amid global economic woes, and marking its first annual contraction since 2009.

The value of total goods exports in 2015 fell by 1.8 percent over the previous year, compared with a rise of 3.2 percent in 2014. It had plunged by 12.6 percent in 2009 following the global financial crisis.

The stagnant whole-year export performance came as no surprise as the city’s export value had tumbled for eight months on the trot last year, with monthly losses narrowing to a year-on-year, 1.1-percent drop in December.

The SAR’s faltering exports trade echoed subdued regional production and trading activities amid sluggish global demand conditions, a government spokesman said.

The city’s imports sector failed to bring any upbeat news either.

Having dived for 10 months in a row last year, with monthly losses contracting to a year-on-year, 4.6-percent decrease in December, import value also registered its first annual contraction in six years.

The value of total goods imports for 2015 declined by 4.1 percent over the previous year, compared with a 3.9-percent surge in 2014 and a nosedive of 11 percent in 2009.

“Looking ahead, the external trading environment will remain challenging. The tepid global economic growth, coupled with uncertainties stemming from monetary policy normalization in the US, diverging monetary policy among major central banks and heightened geopolitical tensions in various regions, will continue to constrain Hong Kong’s export performance in the near term,” the government spokesman added.

Raymond Yeung Yue-ting, Hong Kong-based senior economist at ANZ, believes that a slowing mainland economy will continue to weigh on Hong Kong’s export and import trade this year.

The sustained economic slowdown in the world’s second-largest economy, which accounts for more than half of Hong Kong’s export business, will be an enormous drag on the city’s export trade in 2016.

Although Hong Kong’s total exports to Asia went down by 0.1 percent last year, and exports to most of the major markets remained weak, exports to the mainland still managed to post a 0.9-percent gain.

What goes beyond the worrying figures is the fact that the city’s hard-pressed exporters and importers are bracing for a “new normal” featured by growth lower than before, noted Wang Chunxin, senior economist at Bank of China (Hong Kong).

As the mainland shifts from an export-led economy to a consumption-driven model and the SAR seeing dwindling numbers of mainland visitors with a changing consumption pattern, Hong Kong could hardly duplicate the rapid growth in export and import trade in previous years.

The metropolis, which has long benefited from the “stores in front and factories behind” model, faces a big challenge in keeping its role as a trade hub.

“Due to rising labor costs on the mainland, a good many multinationals have relocated their factories to neighboring low-cost countries. The region’s processing trade chain is undergoing a persistent structural change and is the main culprit behind Hong Kong’s struggling export trade,” Wang said.

The pessimism is shared by the city’s exporters and importers who, coupled with local retailers and wholesalers, prove to be the most pessimistic business groups, seeing the current quarter to be more difficult than in the final three months of 2015, according to a survey by the Census and Statistics Department released last Friday.

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