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Facing up to changing patterns in trade

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With global economic uncertainties deepening, buyers at this year's electronics fair will have the difficult job of anticipating consumer purchasing patterns at a time when consumers are reluctant to reach for their wallets.

Sluggish economic prospects across the world, not to mention security concerns related to terrorism, mean that many of the traditional assumptions about consumer preferences have suddenly been reversed.

Once assured product category winners such as personal digital assistants no longer look so strong, while marketing analysts expect an upsurge in personal security items ranging from burglar alarms to torches, according to Anne Chick, the Trade Development Council's deputy senior manager of exhibitions.

Exporters are also having to prepare themselves for a rapidly changing trade pattern. Shipments to the United States, Hong Kong's leading export destination for electronics merchandise, have fallen 11 per cent in the first seven months of this year. Exports to Europe have fallen 7 per cent. Sales of consumer electronics, including audio and video equipment, electronic toys and games, and electronic clocks and watches were all down from the same period last year.

Asean (Association of South-East Asian Nations) trade figures show a major decline, with Hong Kong exports falling 8 per cent. Sales to Singapore, the largest Asean customer for Hong Kong electronic exports, declined 22 per cent.

On the bright side for Hong Kong manufacturers, exports to Japan defied the downward trend, rising more than 12 per cent in the January to July period. Experts say the market performed well because Japanese manufacturers were sourcing components from lower-cost suppliers in a bid to reduce costs.

China's accession to the World Trade Organisation (WTO) is expected to bring additional benefits both to Hong Kong manufacturers and the SAR's role as an intermediary for global sourcing. The first signs of WTO's impact were evident in this year's trade statistics. Sales of parts and components surged by 23 per cent from January to July. Much of the uptake in demand was as a result of multinationals relocating their labour-intensive production facilities to the mainland.

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