After 13 consecutive months of decline in Hong Kong’s exports, it finally turned up
The Census and Statistics Department announced that the value of exports in December last year was 351.3 billion yuan, an increase of 3.3% year-on-year, which is better than market expectations of a 2.7% increase. It fell 1.9% year-on-year and continued to fall for 13 months. In summary, for the whole year, the value of Hong Kong’s exports fell 4.1% year-on-year, the largest annual decline since the financial tsunami in 2009, while imports fell 6.5% year-on-year. The market expects that the outbreak of the new type of coronavirus pneumonia (Wuhan pneumonia) in the Mainland will be delayed. The delayed resumption of factory work in the Mainland will affect shipments. At the same time, it will be affected by the uncertainty of the Sino-US trade negotiations. .
Imports fall by 1.9%
Last year, a tangible trade deficit of 426.8 billion yuan was recorded, which is equivalent to 9.7% of the value of imported goods. In December, the value of Hong Kong’s exports to Asia rose by 10.2%, of which the value of exports to Mainland China rebounded sharply by 15.7% year-on-year [see table], which was the main contributor to the recovery of Hong Kong’s overall exports; Taiwan and India also increased respectively 7.8% and 6.8%. However, with the exception of Asia, the value of exports to other major destinations continued to decline. For example, the value of the United States fell by 22.5%, while Germany and the United Kingdom fell by 12.1% and 2%, respectively.
A government spokesman said that the value of merchandise exports returned to growth in December, mainly due to the low base of exports to the Mainland, while exports to major advanced economies remained weak, and other major Asian markets also performed unevenly. The spokesman pointed out that Hong Kong’s export performance in the short term is still facing a high degree of uncertainty. Although the global economic situation showed signs of stabilization late last year, partly due to the cooling of Sino-U.S. Trade frictions, external uncertainties remained high, including major There are trade disputes between economies, tense geopolitical situations, and Brexit developments. In particular, the development of new pneumonia may affect the performance of some Asian economies and interfere with Hong Kong’s economic activities.
DBS Hong Kong economist Xie Jiaxi analyzed that due to the low base in December of the previous year and the market’s expectation in December of last year that China and the United States would reach the first phase of a trade agreement, all of which are good for export performance. However, the new pneumonia epidemic is now expanding, and a large number of factories have been postponed to start construction. Future shipments may be delayed, which will affect the short-term export performance of Hong Kong. He expected that in January, under the effect of the Spring Festival, exports will continue to improve, but the situation will sharply decline in February, and China will concentrate its firepower to fight the epidemic. The second phase of the Sino-US trade talks may be postponed, plus the external environment is not good. Certainty has risen. It is estimated that Hong Kong’s exports will show negative growth in the first half of the year.
Delays in the Mainland hinder shipments
Wu Hongbin, President of the Chinese Manufacturers’ Association of Hong Kong, mentioned that in the past, factories in the Mainland would normally resume work on the 10th day of the year (this year is February 3). The epidemic situation also affected transportation. Some factory workers may be deferred to resume work due to fear of illness. At present, it is estimated that Mainland factories can resume normal operation as soon as February.
Regarding the rebound in exports in December last year, Wu Hongbin believes that it is mainly due to the low base in the previous year. December 2018 is the stage of the heating up of the Sino-US trade war. The industry is generally pessimistic about export orders this year, especially after the Spring Festival. Earlier due to the gradual loss of trade wars, customer orders have also shrunk compared to the past.
In addition, Hu Baixuan, Chairman of the Hong Kong Freight Logistics Association, predicts that in the first half of this year, due to social events and epidemic conditions, Hong Kong’s exports will remain the same as in the first half of last year. Only then will the situation be improved, and the current partial customs clearance has little effect on the freight industry in Hong Kong.