Hong Kong’s big trade deficit almost disappears as exports surge

[HONG KONG] Hong Kong had its narrowest trade deficit in over a year as export growth held up better than expected in July, with shipments to mainland China reaching a record high.

Government data on Tuesday (Aug 25) showed the shortfall at just HK$4.9 billion (US$624 million) last month, compared with a gap as wide as HK$89.1 billion in March. Exports rose almost 51 per cent from a year earlier, faster than estimated by economists surveyed by Bloomberg, while imports grew less than forecast.

The transshipment hub is a gateway for many goods headed to mainland China, as a global investment supercycle in artificial intelligence propels demand for exports across Asia. Hong Kong’s government raised its full-year economic growth forecast earlier this month and now expects gross domestic product to expand 3.5 per cent to 4.5 per cent in 2026, up from a previous projection of 2.5 per cent to 3.5 per cent.

“Looking ahead, robust global demand for AI-related electronic products is expected to continue supporting Hong Kong’s merchandise trade performance,” a government spokesman said in a statement. “However, downside risks remain. Geopolitical tensions in the Middle East, trade protectionism among advanced economies, and risks associated with the rapid expansion of global investment in AI all warrant close monitoring.” BLOOMBERG