Growth in Hong Kong exports is likely to slow for the first time in six quarters as manufacturers worry about the adverse impact of a stronger yuan, escalating trade frictions and wage inflation. This is the latest finding of a Hong Kong Trade Development Council (HKTDC) quarterly poll of 500 manufacturers, with its export index dipping to 56.2 in the third quarter of this year from 59.1 in the second quarter. A reading above 50 means expansion, while a reading below 50 indicates contraction. Council chief economist Edward Leung Hoi-kwok said manufacturers of electronics, toys and clothing were less confident about the third-quarter outlook and their confidence in hiring was weakened because of labour shortages across the border. Leung said producers broadly felt prospects for US consumer demand and Japanese economic growth were less promising. However, they were relatively positive about the European Union market despite the continuing debt crisis, he said. 'Most of the correspondents feel cautious about the export outlook, but not pessimistic,' he said. 'The general feeling on the final quarter of this year is OK, but it depends on various key factors.' He was referring to such factors as whether trade protectionism would worsen, whether yuan appreciation would accelerate and whether the labour shortage would intensify, pushing mainland wages still higher. A fresh test for Sino-US trade relations emerged yesterday when the US filed two complaints against China with the World Trade Organisation, seeking dispute settlement consultation on China's anti-dumping and countervailing duties on US-made grain-oriented flat-rolled electrical steel products and mainland discrimination against US suppliers of electronic payment services. The steel product is commonly used in transformers, reactors and electric machines. Some US lawmakers have criticised the level of the yuan, calling for it to appreciate faster, but Leung said gains in the yuan would threaten the livelihood of Chinese exporters. 'Yuan appreciation has been a big burden and worry to Hong Kong exporters,' Leung said. 'Many can only pass some of the extra costs on to customers.' He estimated that every 10 per cent rise in the yuan exchange rate against the US dollar meant that manufacturers' costs jumped from 3 per cent to 5 per cent. The People's Bank of China fixed the midpoint exchange rate of the yuan at US$6.7181 yesterday, setting a new record five days in a row.