Rising exports give boost to external trade

PUBLISHED : Friday, 29 October, 1999, 12:00am
UPDATED : Friday, 29 October, 1999, 12:00am

Hong Kong's external trade rebounded for the third successive month last month as the value of exports rose 5.9 per cent from a year earlier.

However, domestic trade continued to flounder.

Import demand was spurred by firmness in the region's economic recovery as well as strong buying by United States consumers and improving economies in Europe.

A continued upturn in the mainland's overall export performance also bolstered trade.

The value of total exports amounted to $121 billion, with re-exports up 8.3 per cent year on year to $106.3 billion.

Domestic exports, which for some time now have lagged in performance, fell 8.4 per cent in value to $14.7 billion.

At the same time, the value of imports rose 7.9 per cent from a year earlier to $124.8 billion, giving Hong Kong a trade deficit of $3.8 billion.

This deficit, more than twice the previous month's total of $1.5 billion, was equivalent to 3 per cent of the total value of imports.

Again, the increasing value of imports suggested growing strength of positive consumer sentiment, which resulted in improved retail sales volumes during July and August.

Economists noted that although the year-on-year growth was encouraging, the gains were still off a low base, given the falls sustained during the height of the recession last year.

Chief economist at Hong Kong General Chamber of Commerce, Ian Perkin, forecast an improvement in services export figures, further underlying the recovery process.

'Barring unforeseen events, the way is now open for continued improvement in the trade performance to year's end as figures for the rest of the year will be coming off a low base and will gain from the normal final-quarter seasonal recovery,' Mr Perkin said.

Despite what now appears to be a sustained rejuvenation of Hong Kong's external sector, overall exports remain down 3.3 per cent for the first nine months compared with the same period a year earlier.

Within this total the value of re-exports is 1.8 per cent lower, while domestic exports are 12.4 per cent off the equivalent period last year.

Imports are down 6.9 per cent over the same period.

However, comparing trade performance between the second and third quarter shows evidence of improving conditions, with total exports rising 4.9 per cent.

Even domestic exports were up 1.2 per cent quarter on quarter.