Hong Kong exports drop most in almost 7 decades on global slump

HONG Kong’s exports plummeted in November by the most in nearly seven decades as a slump in China’s economy and global demand worsened, making the road to recovery even tougher for the financial hub.

Overseas shipments plunged 24.1 per cent last month from a year earlier, the Census and Statistics Department said on Thursday (Dec 29). That was the worst decline since 1954, and far more severe than the median estimate of a 16.2 per cent decline in a Bloomberg survey of economists. Exports fell 10.4 per cent in October.

Imports declined 20.3 per cent in November from a year earlier – the biggest drop since 2009 and worse than economists’ projection of a 13.8 per cent decline. The trade deficit was HK$27.1 billion (S$4.7 billion).

A government spokesman attributed the falls to a “deteriorating external environment and disruptions to cross-boundary land transportation,” according to a statement accompanying the release. China had strict Covid restrictions in place at the time to curb infections, but has since dropped them.

Exports to mainland China, the US and other economies including Japan, Taiwan and Vietnam all dropped by double-digit percentages. The decline in shipments to China was 29.7 per cent, far worse than October’s drop of 12.9 per cent. Exports to the US plunged 26.8 per cent.

Hong Kong’s economy has struggled throughout 2022 under the weight of pandemic controls, a global demand slowdown and economic turmoil in China, which spent much of the year in Covid Zero isolation. Gross domestic product in Hong Kong is expected to contract for the third time in four years.

The city this week announced it was ending some of its last major Covid rules, including tests for inbound travellers and caps on public gatherings, bolstering prospects for an economic turnaround in 2023.

Still, Hong Kong’s export performance “will continue to face huge challenges in the near term, as monetary policy tightening in advanced economies further dampens demand,” the government spokesman said. He said the relaxation of border restrictions though “may offset some of the pressures.” BLOOMBERG