Hong Kong eyes 2021 export rebound as trade group forecasts 5 per cent bump on back of China strategy shift, new US president

The Hong Kong Trade Development Council also points to third-quarter boost in easing predicted contraction for 2020

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The Hong Kong Trade Development Council on Wednesday predicted the city’s export numbers would jump 5 per cent in 2021. Photo: Winson Wong

Published: 7:24pm, 9 Dec 2020Updated: 11:22pm, 9 Dec 2020

Hong Kong exports, a victim of US-China political fallout and the Covid-19 pandemic, are set to rebound next year, growing 5 per cent on the back of the mainland’s renewed focus on domestic consumption and a relatively more predictable trade regime brought by a change in American presidents.

That was the forecast offered on Wednesday by the Hong Kong Trade Development Council (TDC), whose director of research, Nicholas Kwan Ka-ming, said signs of a turnaround in exports first emerged in the third quarter this year when they jumped 4.4 per cent, due largely to spending on the mainland, Hong Kong’s biggest market.

Based on existing trends, the city’s trade promotion body also upgraded its full-year forecast for 2020 exports, Kwan said at a press conference, predicting a contraction of 3 per cent – a marked improvement from the 10 per cent decline forecast in the middle of the year.

U.S. President-elect Joe Biden is not expected to usher in a sea change in US-China relations, but some early moves suggest a return to a more orthodox approach. Photo: Reuters

“China’s plan to boost internal spending, part of the so-called dual circulation policy, will be a driving force for the rebound in exports,” he said.

“Nevertheless, even with a better-than-expected performance this year, when combined with the 4.1 per cent drop in exports last year, Hong Kong’s external trade has remained painful for exporters and has yet to go back to the pre-trade war levels of 2017 (a year in which exports jumped 8 per cent).”

China began pushing its dual circulation strategy in November in a bid to lower reliance on export-oriented development amid an increasingly hostile external environment – most notably soured relations with the US.

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