Hong Kong’s exports dropped for the 12th straight month in October by almost a tenth year on year due to the double whammy of the US-China trade war and weak global demand.
The city’s October exports value shrank 9.2 per cent to HK$348.5 billion (US$44.5 billion) from the same month last year – a steeper fall from 7.3 per cent in September, according to data from the Census and Statistics Department on Tuesday.
Last month, imports also slipped 11.5 per cent to HK$379.1 billion, resulting in a trade deficit of HK$30.6 billion.
A government spokesman attributed the accelerating decline in October to the sluggish global demand and ongoing US-China trade disputes, with exports to many major markets registering visible falls.
“Hong Kong's merchandise export performance will likely stay weak in the near term, as soft global economic growth and uncertainties stemming from US trade policies continue to dampen external demand,” he said.
For the first 10 months of this year, the value of total exports of goods fell 5.1 per cent compared with the same period in 2018.
The worrying figures came as top trade negotiators from China and the United States held a telephone conversation earlier in the day to discuss their core concerns and agree to maintain communication on a potential interim trade agreement.
China’s Ministry of Commerce said Vice-Premier Liu He, China’s lead negotiator in the trade talks, as well as US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin reached consensus on solving related problems.
The phone call took place a day after China summoned Terry Branstad, the US ambassador to Beijing, to protest against the passing in the US Congress of the Hong Kong Human Rights and Democracy Act – China’s third such move in less than a week.
Although the passage of the act had raised the possibility that China could retaliate by taking a more hardline stance in the trade talks, the call on Tuesday suggested that Beijing was keeping the trade negotiations largely separate from its other disputes with Washington.
Hong Kong Small and Medium Enterprises Association president Pam Mak said she expected that exports in November and December would continue to fall since businesses usually exported goods before October because of the Christmas holidays.
But Mak believed the city’s district council election results announced on Monday could have a more positive impact on the trade talks, adding that she hoped the first quarter in 2020 would see a return to normality.
She said the results, a landslide victory for the pro-democracy camp, indicated Hong Kong was not completely dominated by the pro-establishment camp, and that could make the US more focused on trade instead of human rights issues in the city.
“I can’t say it will be good. But it won’t be as [bad] as these few months,” she said.
In terms of the city’s total exports, the British market was the worst in October, down 22.1 per cent year on year, followed by the US market which recorded a fall of 21.1 per cent.
The overall exports of miscellaneous manufactured articles, mainly jewellery, goldsmiths’ and silversmiths’ wares, fell 19.6 per cent. But there was a 32.8 per cent increase in the exports of power- generating machinery and equipment.
This article Hong Kong exports shrink 9.2 per cent in October as weak global demand, trade tensions persist first appeared on South China Morning Post