Hong Kong’s exports slide as weak global demand hits recovery

HONG KONG’S exports fell for a ninth consecutive month in February as demand for goods from China and the rest of the world remained weak, weighing on the financial hub’s post-pandemic recovery.

Overseas shipments dropped 8.8 per cent from a year earlier, the Census and Statistics Department said on Monday. Still, that was much better than the median estimate of a 28 per cent fall in a Bloomberg survey of economists, with declines in shipments to mainland China and the US not as severe as in recent months. 

Imports decreased 4.1 per cent from a year ago, compared with economists’ expectations of a 23 per cent drop. The trade deficit was US$5.8 billion.

An expected “moderation” of growth in advanced economies this year “will continue to weigh on Hong Kong’s export performance in the near term,” a government spokesman said in a statement accompanying the data release.

Declines in shipments were recorded across Asia in February, with exports to Japan down 23.1 per cent year-on-year. Exports to India dropped 18.5 per cent, while shipments to Taiwan and Singapore fell more than 14 per cent each. 

Exports to mainland China dropped nearly 13 per cent, though that was far improved from declines in January and December of 30 per cent or more. Shipments to the US fell 1.2 per cent.

“The accelerated recovery of the mainland economy, coupled with the removal of cross-boundary truck movement restrictions between Hong Kong and the Mainland, should alleviate part of the pressure,” the spokesman said.

The city’s exports have been on a downward slide for months because of waning demand from China and the rest of the world. January’s plunge in shipments was the worst in 70 years. Other trade-reliant economies, including South Korea and Taiwan, have also posted poor export figures in recent months, in part because China’s reopening has yet to generate a boost in demand. 

Hong Kong is trying to mount a recovery this year after recording its third annual gross domestic product contraction since 2019. Economists recently raised their median forecast for Hong Kong’s GDP expansion in 2023 to 3.4 per cent from an earlier estimate of 2.7 per cent, on the expectation that China’s rebound will spur growth and spending.

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Early recovery signs included a 7 per cent rise in retail sales from a year prior in January, higher than estimates. The government is also handing out more cash vouchers to help domestic consumption. BLOOMBERG