Little impact seen from Japan, Mideast crises

Japan's earthquake and instability in the Middle East should not cost Hong Kong more than HK$48.5 billion in lost exports this year - or the equivalent of about 1.6 per cent of total exports last year - the Trade Development Council said yesterday.

While a disruption to the supply chain for electronic parts will hurt Hong Kong's re-exports to the mainland and to other countries, its effect is expected to last only through the second and third quarters, before revival is seen in the fourth quarter.

Japan is Hong Kong's third-largest export market.

Commenting on the Middle East unrest, TDC assistant chief economist Dickson Ho Tak-kuen said 11 countries in the region accounted for less than 0.6 per cent of Hong Kong's total exports, but the political upheaval could hit oil prices.

'There is no real oil shortage at present, and the escalation in oil prices stemmed mainly from a surge in trading of oil futures, which is caused by worries over Saudi Arabia. But there will be a big problem [in oil supply] if things get out of control there,' he said.

Ho said the council did not consider this likely at this stage given a multibillion-dollar package of reforms, pay rises and cash payouts by Saudi Arabia's king to appease popular unrest. Saudi Arabia produces about nine million barrels of oil a day, compared to about 1.6 million barrels from Libya. 'Every US$10 rise in oil prices is expected to slash a country's [gross domestic product] growth by just 0.2 per cent - that does not sound too bad,' Ho said.