A container ship sails under the Stonecutters Bridge near Kwai Tsing Container Terminals in Hong Kong on May 14, 2019. (PHOTO / AFP)
Hong Kong’s external trade continued to suffer in July, as slower economic growth on the Chinese mainland and Western countries, coupled with interest rate hikes continue to dampen demand and weigh on the city’s exports.
According to the latest statistics released by the Census and Statistics Department on Thursday, Hong Kong’s exports of goods declined by 9.1 percent last month to HK$345.2 billion ($44.02 billion) compared to the same period in 2022, marking the 15th consecutive month of contraction. This follows a year-on-year decrease of 11.4 percent in June.
Imports of goods dropped by 7.9 percent on a yearly basis to HK$375.1 billion in July, narrowing the decline from June’s 12.3 percent. A trade deficit of HK$30 billion was recorded
Imports of goods dropped by 7.9 percent on a yearly basis to HK$375.1 billion in July, narrowing the decline from June’s 12.3 percent. A trade deficit of HK$30 billion was recorded.
“The value of merchandise exports continued to fall in July from a year earlier. Exports to the mainland, the United States and the European Union all shrank. Exports to most other major Asian markets recorded decreases of varying degrees,” a government spokesperson said.
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“The difficult external environment will continue to weigh on Hong Kong’s exports in the near term,” the spokesperson said.
For the first seven months, goods exports in Hong Kong fell by 14.6 percent compared to the same period in 2022, while imports decreased by 12.5 percent, leading to a trade deficit of HK$261.6 billion.
Exports to Asia in July saw a year-on-year decline of 11.6 percent, with the Philippines posting a near 30 percent slump, followed by Malaysia, 24.6 percent. Goods sold to the mainland and Japan dropped by 15.2 percent and 13.2 percent respectively, while those to Thailand saw growth of 11.5 percent.
The United States posted a 5.8 percent yearly decrease in the value of goods imported from Hong Kong last month and a 22.5 percent fall for Germany. A notable increase was recorded for the United Kingdom, with its imports from Hong Kong rising 34.6 percent.
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Terence Chong Tai-leung, executive director of Lau Chor Tak Institute of Global Economics and Finance at the Chinese University of Hong Kong, said that the decline of exports to the United States and European markets can be attributed to weak consumption demand dragged down by their sluggish domestic economies.
Although growth momentum of the mainland economy remains weak, its recent launch of a series of measures to stimulate domestic consumption could help stabilize the demand for goods from Hong Kong, according to comments from Hong Kong-based Dah Sing Bank.
However, external demand could be further dampened as major central banks continue to raise interest rates and the US and Europe economies slow down, it said.
The bank said it believes Hong Kong’s ban on the importation of seafood products from specific Japanese regions would have a limited impact as Japanese goods account for only about 5 percent of total imports.
READ MORE: Hong Kong exports volume down 18.3% in May
Chong has an optimistic outlook for the immediate period ahead, saying he expects a rebound in exports within two to three months as major export destinations deplete their inventories.
