Hong Kong's exports rose a year-on-year 6.2 per cent last month on the back of strong demand for mainland-manufactured goods. The Government said the $125.4 billion in total exports had been underpinned by rising demand in East Asia and Europe. It was the fourth consecutive monthly gain for the SAR's exports. Re-exports increased 8.8 per cent to $111.3 billion year on year, while domestic exports dropped 10.3 per cent to $14 billion. Imports rose 6.8 per cent last month from a year earlier to $126.8 billion. The visible trade deficit widened to $1.4 billion, equivalent to 1.1 per cent of the value of imports, from $700 million or 0.6 per cent of the value of imports a year earlier. Shamus Mok Chung-yuk, an economist at the Bank of East Asia, said domestic exports had not recovered partly due to Hong Kong's continuing lack of competitiveness within a region ravaged by currency devaluations. Mr Mok said the strong re-export figures reflected the improvement in mainland exports which came from the continuing recovery in Asian and Japanese economies, as well as strong demand growth from the European and United States markets. 'China has been recording a strong rebound since July with exports back to positive growth,' he said. Mr Mok said the strong growth in imports was a positive sign as it reflected an improvement in domestic consumption and investment. 'Retailers are now stockpiling goods, which is not something they would do in a deflationary environment,' he said. Alan Hutcheson, director of research at Pacific Challenge Securities, said although Hong Kong was in a recovery position, it was not a particularly strong recovery. He said export growth was still single digit, and unit volumes were still not growing as much as they had been in the early part of the decade. According to Mr Hutcheson, other countries in the region would continue to be more competitive because of their currency devaluations. Tracy Yu Ming-lai, an economist with Standard Chartered Bank, said re-export growth was within expectations as it mirrored the mainland's strong export growth. Ms Yu said the poor domestic export figures reflected the increase in the number of manufacturers moving their operations over the border. 'It is more structural than cyclical,' she said. According to Ms Yu, there would not be a rebound in domestic exports in the first quarter of next year, with any recovery being 'very mild'. For the first 10 months of the year the trade deficit totalled $33 billion, equivalent to 2.9 per cent of the value of imports. According to the Government, this was much smaller than the $74 billion deficit recorded in the same period last year.
