Mainland fears of a slowdown in its export-driven economy have raised hopes that it may relax trade and fiscal policies, which are making life tough for many Hong Kong manufacturers. A shift from anti-inflation measures to growth-led initiatives was on the cards after Beijing revealed for the first time its concern about a possible economic slowdown as the United States subprime turmoil spreads, according to economists and trade bodies. The shift could lead to an easier credit policy, a slower pace in yuan appreciation and fiscal support for the export sector, giving struggling manufacturers much-needed breathing space, they said. 'In three to five months' time, if our baseline forecast of inflation deceleration to below 7 per cent materialises and export volume growth slows to 10 per cent or below year on year, we think the government's macro policy will make a more visible shift from anti-inflation towards pro-growth,' Deutsche Bank chief economist Jun Ma said. Beijing's worries about the ripple effect of the US slowdown surfaced last week when the State Council said that averting economic slowdown was a priority this year, in addition to existing priorities of stemming inflation and tackling economic overheating. The survival of tens of thousands of Hong Kong factory owners across the border has been jeopardised after a string of tough new policies, including cuts in tax rebates, tightened emission control requirements, restricted credit access, new labour laws and the push towards added-value and more technologically advanced goods. The yuan's record-breaking strength, power shortages and spiralling costs for raw materials, labour and fuel are adding to manufacturers' woes. Federation of Hong Kong Industries deputy chairman Stanley Lau Chin-ho said the trade body hoped Beijing would slow the pace of rolling out new policies, which had already forced many factories out of business. 'We want to see planned policies put on hold and we hope Beijing will reduce the number of policies,' Mr Lau said. 'The number of new policies was so frequent and many in the past year that they had a destructive impact not only on manufacturers but also on the mainland and Hong Kong economies.' He added that the US credit market slump had prompted many wholesalers and retailers to cut orders and delay payments. Hong Kong Toy Council chairman Lawrence Chan said he was not surprised to see some financially vulnerable US importers seek bankruptcy protection. 'The toy sector has become a casualty since a string of product recalls last year,' he said. 'The US slowdown will further hurt retailers and increase risks on manufacturers.'