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Amy Nip

Hong Kong's trade figures in the first quarter were worse than analysts expected, with exports to the United States failing to make up for the effects of a continuing slowdown on the mainland.
Domestic exports decreased by 8.7 per cent in the first three months compared with a year ago, but a 0.8 per cent increase in the volume of re-exports of goods meant that the overall decline was 0.7 per cent.
The volume of imported goods increased by 1.1 per cent during the same period, the Census and Statistics Department announced yesterday.
Ryan Lam, senior economist at Hang Seng Bank, said the performance was worse than had been expected.
"It was thought that the slowdown on the mainland would be offset by better performance in Europe and United States," he said.
"Europe was doing fine. But exports to the United States, Hong Kong's biggest trade partner outside of China, didn't pick up much."
Temporary issues such as bad weather and port strikes on the west coast affected trade, Lam said, meaning better performance could be expected in the second half of the year.
Exports to the United States increased by a moderate 3.3 per cent in volume, while the per unit value of goods increased by 1.6 per cent.
However, exports to Japan dropped in both volume and unit value in the first quarter, whereas they rose in volume but dropped in unit value for India.
For March alone, the volume of Hong Kong's re-exports decreased by 3.4 per cent compared with the same month in 2014, while domestic exports dropped significantly - by 20.7 per cent.
Meanwhile, exports to the mainland also performed worse than anticipated as its economy grew at the slowest pace in six years. Gross domestic product increased by 7 per cent in the first quarter compared with the same period a year ago, slowing from 7.3 per cent in the fourth quarter of last year.
Apart from weak domestic demand on the mainland, trade within Asia also remained sluggish, Lam said.
As China's central bank had loosened monetary policy in recent weeks, he believed the drop in export volumes would not continue in the second half.
On Sunday, Beijing announced a cut in interest rates in an attempt to spur the slowing economy and cut fundraising costs for cash-starved businesses. The People's Bank of China said the one-year benchmark lending rate would be cut by 25 basis points to 5.1 per cent, while the deposit rate would also go down 25 basis points to 2.25 per cent.
Earlier this month Financial Secretary John Tsang Chun-wah warned that the economy faced a challenging year amid uncertainty in the global economy, predicting annual growth of between 1 and 3 per cent. That would be well down on the 2.3 per cent growth recorded last year.
Tsang announced help for the city's 320,000 small and medium-sized businesses, including HK$1.5 billion into funds that support their marketing and development.
The city's economic prospects have suffered as a result of the contraction across the border. Last month, mainland imports fell by 16.2 per cent compared with a year earlier to US$176.3 billion following a dip of 12 per cent in March.
Exports fell 6.4 per cent to US$142.1 billion, adding to the decline of 15 per cent in the previous month.


Hong Kong's exports fall amid sluggish trade

Hong Kong International Terminals Limited in Kwai Chung. Photo: Jonathan Wong

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Hong Kong

Hong Kong economy

Moderate increase in the volume of goods shipped to the United States fails to make up for the effects of economic slowdown on mainland
