Fall in exports to Mainland and the rest of Asia as well as lower demand from advanced economies, especially the US put trade in disarray, reports Team IFM
Hong Kong, May 29: Hong Kong’s April trade deficit increased 29.5 percent over its year-ago amount to HK$55.3 billion triggered by a slump in exports to Mainland China and Asia and lower demand from advanced markets, according to data put up by the Census and Statistics Department responsible for releasing trade figures.
Exports of goods, comprising re-exports, decreased 1.6 per cent from the year-ago amount to HK$285.7 billion preceded, however, by a 3.4 percent increase, year-on year, in March this year. Re-exports went down 1.7 percent to HK$280.8 billion whereas domestic exports were up 8.1 percent at HK$4.9 billion.
The deficit widened as imports went up 2.4 percent over their year-ago figures to HK$341 billion with the year-on-year March figures translating into a 3.2 percent increase. At HK$55.3 billion, Hong Kong’s trade deficit was equivalent to 16.2 percent of total imports of goods during the period under review.
For the first four months of 2014, total goods exports were up a tad by 0.1 percent over comparable period in 2013. Within this, the component of re-exports remained almost unchanged but domestic exports went up 1.1 percent. Goods imports too went up 2.1 percent. A visible trade deficit of $178.4 billion, which translated to 13.9 percent of goods imports, was posted during these months.
During the period under review, lower sales were recorded for office machines and automatic data processing machines (-12.9 percent), telecommunications and sound recording and reproducing equipment (-7.0 percent) and miscellaneous manufactured articles including jewellery, gold ornaments and silverware (-10.5 percent). However, shipments of electrical machinery, equipment and appliances and their parts soared (+9.5 percent).
On the import front, increases were witnessed particularly in the principal commodity sections such as electrical machinery, apparatus and appliances, and their electrical parts (by HK$15.3 billion or 16.9 percent) and petroleum, petroleum products and related materials (by HK$2.0 billion or 27.7 percent). However, decreases were registered in the values of imports of office machines and automatic data processing machines (by HK$4.5 billion or -13.6 percent) and telecommunications and sound recording and reproducing apparatus and equipment (by HK$2.8 billion or -5.1 percent).
A press release quoted a government spokesman as saying that merchandise exports relapsed to a decline, year-on-year, in value terms after witnessing an increase during March. Exports to the Mainland saw another month of modest year-on-year decline against a high base of comparison.
ASIAN DRAMA
A comparison of April 2014 figures with the year-ago period showed that Hong Kong’s exports to the rest of Asia went down 1.6 percent: Philippines (-13.7 percent), Singapore (-8.4 percent), Taiwan (-7.8 percent), Malaysia (-3.6 percent), Japan (-3.5 percent), Korea (-2.6 percent), Thailand (-2.0 percent) and China (-1.1 percent). Increases, however, were recorded in exports to Vietnam (+10.3 percent) and India (+1.4 percent).
The comparison also found that increases were registered in the values of imports from most major suppliers, mainly, Malaysia (+45.8 percent), Korea (+19.4 percent), Singapore (+17.0 percent), Thailand (+12.0 percent) and Japan (+11.4 percent). At the same time, however, a decrease was registered in the value of imports from the Mainland (-1.7 percent).
For the first four months of 2014, year-on-year increases were registered in exports to some major destinations, particularly Vietnam (+10.0 percent), India (+4.3 percent) and Singapore (+0.6 percent). However, year-on-year, there were decreases in exports to Taiwan (-6.2 percent), the Mainland (-1.5 percent) and Japan (-1.4 percent).
Over the periods of comparison, year-on-year increases were posted in the values of imports from most major suppliers, mainly Malaysia (+30.4 percent), Thailand (+17.2 percent), Taiwan (+10.8 percent), Korea (+10.7 percent) and Japan (+4.7 percent). A year-on-year decrease, however, was registered in the value of imports from the Mainland (-2.3 percent).
A comparison of the three-month period to April 2014, with the preceding three months on a seasonally adjusted basis, found that the value of total exports of goods decreased by 7.9 percent and that included the value of re-exports which decreased by 8.1 percent. Domestic exports, however, increased by 1.2 percent. Incidentally, the value of goods imports decreased by 5.1 percent.
ADVANCED MARKETS DISAPPOINT
Lower demand from advanced markets hit exports too. The weaker export performance is being attributed partly to the different timings of Easter holidays in 2013 and 2014. Sales to the United States fell 5.6 percent while those to the United Kingdom and Germany went up 7.7 and 0.7 percent, respectively.
During March and April, however, exports to the US and Europe did show some improvement from the rather weak performance at the beginning of the year.
The spokesman further said that going forward, the pace of growth in the advanced economies would eventually translate into stronger demand for goods from Asia and should benefit Hong Kong. But the expected improvement is conditional to some factors such as the future course of US monetary policy and the recent geopolitical tensions around the world.
Since the late 1990’s, Hong Kong has been recording trade deficits with imports growing at a much faster pace than exports. In fact, its trade deficits history dates back to 1952. The deficit averaged at HK$54.05 billion in the period between 1952 and 2014, peaking at an all-time high of $72.28 billion in January 2009 and now recording a low of $55.3 billion for the period under review.
Hong Kong’s major exports include electronics and household electrical appliances, clothing and footwear, textile yarn and fabrics, toys and games, and watches and clocks. The country imports mainly machinery and equipment, manufactured goods and articles, mineral fuels and food. Its main trading partner is Mainland China (54 percent of total exports and 45 percent of total imports). Others include Japan, the United States and Taiwan.