THAILAND is stepping up the ladder as one of Hong Kong's most important trading partners, this year moving up two places to become the territory's 13th largest trader. Increasing bilateral trade was the trend, said Wilson Law, Hong Kong Trade Development Council's research manager. Bilateral trade rose by 26 per cent after a 24 per cent jump in re-exports to Thailand from January to August, he said. Bilateral trade had generated $17 billion to August but a 29 per cent jump in imports had kept the balance of trade in Thailand's favour, he said. Hong Kong's deficit in the first eight months of this year was $5 billion, while the total deficit for 1993 was $5.1 billion. 'The trade deficit for Hong Kong is not disastrous but the gap is widening,' he said. 'Although by the end of the year it is likely to have increased, it should not affect the otherwise healthy bilateral trade.' Textiles and yarns made up 19 per cent of domestic exports to Thailand and that decreased by one per cent in the first eight months of the year. 'Most of our domestic exports to other countries have decreased but Thailand is an exception to the rule and, this year, they have increased by 15 per cent,' he said. 'Compared with our worldwide domestic exports, Thailand is performing well, apart from a tiny decrease in domestic exports of textiles, the largest commodity. 'The types of products exported to Thailand have not deviated greatly over the past five years and a stable product mix has contributed to growth in domestic products to Thailand.' The slight decrease in textile exports was outweighed by a 36 per cent increase in machinery exports and a 109 per cent jump in aluminium sold to Thailand, Mr Law said. Exports of camera equipment also rose 54 per cent. Infrastructural development in Thailand's capital, Bangkok, and the building of a mass transportation system had meant more demand for many Hong Kong products, he said. 'Although the type of products Thailand imports from Hong Kong have not changed, the demand has increased because of large amounts of development work being carried out,' he said. 'But the increases should not be looked at out of context and are nothing compared to the $306 million generated by textile exports.' Electrical machinery made up 15 per cent of the total and brought in more than $232 million, he said. Re-exports to Thailand also had performed well over the first eight months of the year, having risen by 24 per cent to generate $4.6 billion, Mr Law said. Textiles, yarns and fabrics also dominated re-exports to Thailand and brought in $639 million, accounting for 14 per cent of total re-exports. 'There was an increase of 15 per cent in textile re-exports to Thailand, which is not surprising as the market for those products is well developed,' Mr Law said. 'However, large increases in other re-exports, such as telecommunication and audio-visual equipment, is due to developing the country's infrastructure.' Telecommunication equipment re-exported to Thailand earned the territory $552 million and, after a 46 per cent increase to August, accounted for 12 per cent of total re-exports to the country. Electrical machinery made up 10 per cent of re-exports and also increased by 27 per cent. Most was used on building and construction sites in Bangkok, Mr Law said. Most exports and re-exports to Thailand were semi-finished and would be processed and value-added in Bangkok, Mr Law said. Hong Kong's imports from Thailand also performed well over the first three quarters of this year. Imports increased by 29 per cent to $11.1 billion. The main import was food products, which made up 23 per cent of total imports from Thailand. The value of imports amounted to $2.6 billion, up 26 per cent. Rice, fruit, poultry and meats topped the import list. These were followed by imports of electrical equipment, pearls and precious stones.